Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an a comparative assessment of the Government's reforms of buy now pay later regulation with similar reforms in other fintech centres.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government is working to bring currently unregulated fixed-sum Buy-Now Pay-Later (BNPL) agreements into regulation in a proportionate way. This recognises that, when appropriately used, BNPL products are lower-risk than interest bearing credit products and can be a useful tool for consumers to manage their finances.
The Government’s approach includes tailoring the application of the Consumer Credit Act 1974 to BNPL agreements, to provide appropriate consumer protections without unduly limiting access to these products. In developing this approach, the Government consulted extensively with consumer groups and industry stakeholders to understand the impact of its proposals on consumers and firms.
A further consultation on the draft secondary legislation that will bring BNPL into regulation closed on 11 April. The Government is now carefully considering stakeholder feedback and will publish a consultation response which will set out next steps. The Government will publish an impact assessment ahead of laying any legislation, which will also consider the impacts on consumers of bringing BNPL into regulation.
As part of the policy development process, the Government has engaged with regulators in other comparable jurisdictions to understand how they are approaching the regulation of BNPL.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what comparative assessment he has made of the potential adequacy of fixed Buy Now Pay Later credit products compared to open credit arrangements.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government is working to bring currently unregulated fixed-sum Buy-Now Pay-Later (BNPL) agreements into regulation in a proportionate way. This recognises that, when appropriately used, BNPL products are lower-risk than interest bearing credit products and can be a useful tool for consumers to manage their finances.
The Government’s approach includes tailoring the application of the Consumer Credit Act 1974 to BNPL agreements, to provide appropriate consumer protections without unduly limiting access to these products. In developing this approach, the Government consulted extensively with consumer groups and industry stakeholders to understand the impact of its proposals on consumers and firms.
A further consultation on the draft secondary legislation that will bring BNPL into regulation closed on 11 April. The Government is now carefully considering stakeholder feedback and will publish a consultation response which will set out next steps. The Government will publish an impact assessment ahead of laying any legislation, which will also consider the impacts on consumers of bringing BNPL into regulation.
As part of the policy development process, the Government has engaged with regulators in other comparable jurisdictions to understand how they are approaching the regulation of BNPL.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, whether he has made an assessment of the potential impact on consumers of applying the Consumer Credit Act 1974 to buy now pay later products.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
The Government is working to bring currently unregulated fixed-sum Buy-Now Pay-Later (BNPL) agreements into regulation in a proportionate way. This recognises that, when appropriately used, BNPL products are lower-risk than interest bearing credit products and can be a useful tool for consumers to manage their finances.
The Government’s approach includes tailoring the application of the Consumer Credit Act 1974 to BNPL agreements, to provide appropriate consumer protections without unduly limiting access to these products. In developing this approach, the Government consulted extensively with consumer groups and industry stakeholders to understand the impact of its proposals on consumers and firms.
A further consultation on the draft secondary legislation that will bring BNPL into regulation closed on 11 April. The Government is now carefully considering stakeholder feedback and will publish a consultation response which will set out next steps. The Government will publish an impact assessment ahead of laying any legislation, which will also consider the impacts on consumers of bringing BNPL into regulation.
As part of the policy development process, the Government has engaged with regulators in other comparable jurisdictions to understand how they are approaching the regulation of BNPL.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if his Department will take steps to amend the legislation underpinning the Stamp Duty Reserve Tax so that newly-recognised growth markets are not required to be part of a recognised stock exchange.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
There are currently no plans to extend the recognised growth market exemption from Stamp Duty Reserve Tax to markets that are not part of a recognised stock exchange.
However, the Government keeps all areas of the tax system under review.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, when the Government plans to deliver a consolidated tape of pre- and post-trade market data as considered in the Edinburgh Reforms.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
As set out in the Chancellor’s Edinburgh Reforms statement, the government has committed to having a regime for a UK consolidated tape in place by 2024.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what comparative assessment he has made of the costs to businesses of the Financial Services Compensation Scheme and similar schemes in other leading financial centres.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
Under the Financial Services and Markets Act (FSMA) 2000, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are each responsible for making rules in relation to the Financial Services Compensation Scheme (FSCS). The PRA is responsible for rules relating to claims in connection with deposits and insurance provision. The FCA is responsible for claims in connection with all other relevant types of financial services activities that are protected by the FSCS.
As part of its responsibilities, the PRA is responsible for setting the depositor coverage limit, which is currently set at £85,000. The PRA has a statutory duty to review this limit regularly, with the next review due by 2025 at the latest. Any change to the limit must be approved by HM Treasury and would therefore be carefully considered by the government.
The FCA is currently reviewing the FSCS compensation framework for areas it is responsible for. In its Feedback Statement published in December 2022, it committed to a number of actions including plans to assess the scope of FSCS coverage, review the current compensation limits and review the current funding class thresholds.
Under the Financial Services and Markets Act 2000, the PRA and FCA are also required to conduct a cost-benefit analysis to ensure the compensation schemes managed by FSCS continue to reflect the total value of the claims made or likely to be made.Both the PRA and FCA would use such assessments in forming its overall judgement on forming rules in relation to the FSCS.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the implications for his policies of the Financial Conduct Authority’s Feedback Statement on the Financial Services Compensation Scheme.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
Under the Financial Services and Markets Act (FSMA) 2000, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are each responsible for making rules in relation to the Financial Services Compensation Scheme (FSCS). The PRA is responsible for rules relating to claims in connection with deposits and insurance provision. The FCA is responsible for claims in connection with all other relevant types of financial services activities that are protected by the FSCS.
As part of its responsibilities, the PRA is responsible for setting the depositor coverage limit, which is currently set at £85,000. The PRA has a statutory duty to review this limit regularly, with the next review due by 2025 at the latest. Any change to the limit must be approved by HM Treasury and would therefore be carefully considered by the government.
The FCA is currently reviewing the FSCS compensation framework for areas it is responsible for. In its Feedback Statement published in December 2022, it committed to a number of actions including plans to assess the scope of FSCS coverage, review the current compensation limits and review the current funding class thresholds.
Under the Financial Services and Markets Act 2000, the PRA and FCA are also required to conduct a cost-benefit analysis to ensure the compensation schemes managed by FSCS continue to reflect the total value of the claims made or likely to be made.Both the PRA and FCA would use such assessments in forming its overall judgement on forming rules in relation to the FSCS.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will make a statement on plans to update the Financial Services Compensation Scheme.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
Under the Financial Services and Markets Act (FSMA) 2000, the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) are each responsible for making rules in relation to the Financial Services Compensation Scheme (FSCS). The PRA is responsible for rules relating to claims in connection with deposits and insurance provision. The FCA is responsible for claims in connection with all other relevant types of financial services activities that are protected by the FSCS.
As part of its responsibilities, the PRA is responsible for setting the depositor coverage limit, which is currently set at £85,000. The PRA has a statutory duty to review this limit regularly, with the next review due by 2025 at the latest. Any change to the limit must be approved by HM Treasury and would therefore be carefully considered by the government.
The FCA is currently reviewing the FSCS compensation framework for areas it is responsible for. In its Feedback Statement published in December 2022, it committed to a number of actions including plans to assess the scope of FSCS coverage, review the current compensation limits and review the current funding class thresholds.
Under the Financial Services and Markets Act 2000, the PRA and FCA are also required to conduct a cost-benefit analysis to ensure the compensation schemes managed by FSCS continue to reflect the total value of the claims made or likely to be made.Both the PRA and FCA would use such assessments in forming its overall judgement on forming rules in relation to the FSCS.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the value of Additional Tier 1 bonds supporting UK banks is; and what assessment he has made of the potential impact of the takeover of Credit Suisse on UK Banks' ability to issue those bonds in the future.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
As noted by the Chancellor on Monday 20 March, the Government welcomes the steps taken by the Swiss authorities in relation to Credit Suisse to support financial stability.
The Bank of England published a statement to reiterate the creditor hierarchy in the UK. The statement confirmed that Additional Tier 1 (AT1) instruments rank ahead of Common Equity Tier 1 (CET1) and behind Tier 2 (T2) instruments in the insolvency creditor hierarchy. Holders of such instruments should expect to be exposed to losses in resolution or insolvency in the order of their positions in this hierarchy.
The Prudential Regulation Authority is responsible for supervising UK banks’ capital adequacy requirements. The Bank of England's quarterly statistical release shows that the value of Additional Tier 1 capital in the UK banking sector was £67 billion as at Q3 2022. This figure includes both externally issued and intragroup capital instruments.
The Governor of the Bank of England has confirmed that the UK banking system remains safe, sound and well capitalised.
Asked by: Alun Cairns (Conservative - Vale of Glamorgan)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential implications for (a) his policies and (b) the banking sector of the treatment of additional tier-one bondholders in the takeover of Credit Suisse.
Answered by Andrew Griffith - Minister of State (Department for Science, Innovation and Technology)
As noted by the Chancellor on Monday 20 March, the Government welcomes the steps taken by the Swiss authorities in relation to Credit Suisse to support financial stability.
The Bank of England published a statement to reiterate the creditor hierarchy in the UK. The statement confirmed that Additional Tier 1 (AT1) instruments rank ahead of Common Equity Tier 1 (CET1) and behind Tier 2 (T2) instruments in the insolvency creditor hierarchy. Holders of such instruments should expect to be exposed to losses in resolution or insolvency in the order of their positions in this hierarchy.
The Prudential Regulation Authority is responsible for supervising UK banks’ capital adequacy requirements. The Bank of England's quarterly statistical release shows that the value of Additional Tier 1 capital in the UK banking sector was £67 billion as at Q3 2022. This figure includes both externally issued and intragroup capital instruments.
The Governor of the Bank of England has confirmed that the UK banking system remains safe, sound and well capitalised.