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Written Question
Financial Services and Markets Act 2023
Wednesday 19th July 2023

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask His Majesty's Government when they plan to bring section 27 (Regulatory principles) of the Financial Services and Markets Act 2023 into force; and when they will lay regulations before parliament naming this date.

Answered by Baroness Penn - Minister on Leave (Parliamentary Under Secretary of State)

Section 27 of the Financial Services and Markets Act 2023 adds the UK's net zero target and environmental targets into the regulatory principles for the Prudential Regulation Authority and the Financial Conduct Authority.

The requirement for the regulators to have regard to the need to contribute to achieving the net zero target will come into force two months after Royal Assent, on 29 August. The commencement regulations that did this, the Financial Services and Markets Act 2023 (Commencement No. 1) Regulations 2023, were made on 10 July.

The requirement to have regard to the need to contribute to achieving the environmental targets will come into force at a later date. This requirement was added by amendment late in the passage of the Act, and the regulators will need time to consider how to operationalise this requirement. The government is working with the regulators to explore the earliest date that this requirement can come into force.


Written Question
Financial Services
Wednesday 15th December 2021

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask Her Majesty's Government what assessment that have made of the size of the financial services market (1) regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA), (2) to which the remit, recommendations and priorities letters sent by HM Treasury to the FCA and PRA on 23 March 2021 apply, and (3) to which the provisions of the Financial Services Act 2021 apply with respect to the requirements on the FCA and PRA to have regard to the target in section 1 of the Climate Change Act 2008.

Answered by Lord Agnew of Oulton

The Financial Conduct Authority (FCA) regulates around 51,000 firms, of which around 1,500 are also regulated by the Prudential Regulation Authority (PRA). As set out in the Financial Services and Markets Act 2000 and the Bank of England Act 1998, the letters of recommendations issued by the Chancellor of the Exchequer to the FCA and the Prudential Regulation Committee (PRC) apply to the advancement of the regulators’ objectives and the discharge of their duties. As such, where relevant and practical, the letters of recommendations apply to the FCA and PRA’s policymaking in all areas they regulate.

The Financial Services Act 2021 introduced a number of different measures which are vital to enhance the UK’s world-leading prudential standards, promote financial stability, promote openness between the UK and international markets, and maintain an effective financial services regulatory framework and sound capital markets. The government’s assessment of the Financial Services Act 2021 was set out in the accompanying Impact Assessment.

Under the Financial Services Act 2021, both the FCA and PRA must have regard to the UK’s net zero emissions target when making rules that introduce the Investment Firms Prudential Regime (IFPR) and implement the remaining Basel standards as contained in the Capital Requirements Regulation respectively. This provision applies to those rules made after 1 January 2022.

As noted in the Impact Assessment for the Financial Services Act 2021, there are currently around 3,200 investment firms which fall under the IFPR. There are around 1,500 firms subject to the Capital Requirements Regulation.


Written Question
Financial Services
Wednesday 15th December 2021

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask Her Majesty's Government what assessment that have made of the size of the financial services market to which (1) the Financial Services Act 2021 applies, and (2) the climate change provisions of the Financial Services Act 2021 in (a) Schedule 2, section 143G(1)(c), and (b) Schedule 3, section 144C(1)(d) apply.

Answered by Lord Agnew of Oulton

The Financial Conduct Authority (FCA) regulates around 51,000 firms, of which around 1,500 are also regulated by the Prudential Regulation Authority (PRA). As set out in the Financial Services and Markets Act 2000 and the Bank of England Act 1998, the letters of recommendations issued by the Chancellor of the Exchequer to the FCA and the Prudential Regulation Committee (PRC) apply to the advancement of the regulators’ objectives and the discharge of their duties. As such, where relevant and practical, the letters of recommendations apply to the FCA and PRA’s policymaking in all areas they regulate.

The Financial Services Act 2021 introduced a number of different measures which are vital to enhance the UK’s world-leading prudential standards, promote financial stability, promote openness between the UK and international markets, and maintain an effective financial services regulatory framework and sound capital markets. The government’s assessment of the Financial Services Act 2021 was set out in the accompanying Impact Assessment.

Under the Financial Services Act 2021, both the FCA and PRA must have regard to the UK’s net zero emissions target when making rules that introduce the Investment Firms Prudential Regime (IFPR) and implement the remaining Basel standards as contained in the Capital Requirements Regulation respectively. This provision applies to those rules made after 1 January 2022.

As noted in the Impact Assessment for the Financial Services Act 2021, there are currently around 3,200 investment firms which fall under the IFPR. There are around 1,500 firms subject to the Capital Requirements Regulation.


Written Question
Financial Services: Carbon Emissions
Wednesday 16th June 2021

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask Her Majesty's Government, further to the Greenpeace UK and WWF-UK report The Big Smoke, published on 26 May, what assessment they have made of the recommendation that legislation should be introduced before COP26 to require all UK-regulated financial institutions to adopt and implement a transition plan that is in keeping with the goal of limiting global temperature rises to 1.5 degrees C.

Answered by Lord Agnew of Oulton

The UK was the first major economy to commit to Net Zero by 2050, and to achieve that ambition, we want to ensure that every financial decision takes climate change into account. This will require a drastic increase in the quantity, quality and comparability of climate-related disclosures, to provide the information necessary for everyone to make informed decisions.

That is why, in November 2020, the Chancellor announced the UK’s intention to make disclosures in line with the recommendations of the Task Force for Climate-related Financial Disclosures – including that firms must disclose how they identify, assess and manage climate-related risks – fully mandatory in the UK across the economy by 2025. This includes the financial services sector. This commitment is world-leading and significant progress towards achieving our ambition, including new requirements for premium-listed firms, has already been made.

We have also committed to implementing a green taxonomy that will establish a common definition for ’sustainable economic activities’ and improve understanding around the impact of firms’ activities and investments on the environment.

Together, these measures will ensure that firms across the whole economy are disclosing robust and comparable climate and sustainability-related information that is decision-useful for investors. This will help close the sustainability data gap, as well as preventing greenwashing and supporting the greening of the UK economy.

In addition to this work, ahead of COP26, the UK launched the Glasgow Financial Alliance for Net Zero (GFANZ), a global net zero alliance for the whole financial sector to ensure credibility and generate momentum behind private sector commitments to reach net zero emissions by 2050. GFANZ will mobilise and elevate net zero ambition by motivating financial institutions to make credible net zero commitments by the time of Glasgow and beyond and establishing defined and agreed ways for all financial institutions to meaningfully commit to net zero by 2050.


Written Question
Financial Services
Wednesday 28th April 2021

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask Her Majesty's Government further to the statement by Lord Agnew of Oulton on 11 November 2020 (HL Deb, cols 1115–28) on the future of financial services, what plans they have to publish details of the membership of the Green Technical Advisory Group; and when they estimate that Group will complete its work.

Answered by Lord Agnew of Oulton

The Government has announced that it will be launching a Green Technical Advisory Group to provide independent advice on how to effectively implement a Green Taxonomy in the UK. This group will be made up of experts drawn from taxonomy users, academia, science, and NGOs. The Green Finance Institute will act as the secretariat for this group. As a first step, the GFI will provide independent advice, in consultation with industry, on the group’s membership and its work plan. we will provide more details on this in due course.

The Government is required to make Technical Screening Criteria (TSC) for climate change mitigation, and climate change adaptation no later than 1 January 2023. These TSC will be subject to appropriate, open consultation prior to making.


Written Question
Financial Services
Wednesday 28th April 2021

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask Her Majesty's Government, further to the statement by Lord Agnew of Oulton on 11 November 2020 (HL Deb, cols 1115–28) on the future of financial services, what plans they have to consult industry and other interested parties on the technical screening criteria for the UK’s ‘green taxonomy.’

Answered by Lord Agnew of Oulton

The Government has announced that it will be launching a Green Technical Advisory Group to provide independent advice on how to effectively implement a Green Taxonomy in the UK. This group will be made up of experts drawn from taxonomy users, academia, science, and NGOs. The Green Finance Institute will act as the secretariat for this group. As a first step, the GFI will provide independent advice, in consultation with industry, on the group’s membership and its work plan. we will provide more details on this in due course.

The Government is required to make Technical Screening Criteria (TSC) for climate change mitigation, and climate change adaptation no later than 1 January 2023. These TSC will be subject to appropriate, open consultation prior to making.


Written Question
Financial Services: Environment Protection
Monday 30th November 2020

Asked by: Baroness Hayman (Crossbench - Life peer)

Question to the HM Treasury:

To ask Her Majesty's Government, further to the statement on the future of financial services by the Chancellor of the Exchequer on 9 November (HC Deb, cols 619–21), what plans they have to consult on the new green taxonomy.

Answered by Lord Agnew of Oulton

The UK Taxonomy will use the EU framework which is already part of UK law, as amended by the EU Withdrawal Act. The UK will be establishing a Green Technical Advisory Group to advise the government on an ongoing basis on any improvements or additions that could be made to the taxonomy for the UK context. We will set out more details on this in due course.