Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effectiveness of the Financial Conduct Authority’s recent extension of the Temporary Registration Regime for cryptoasset businesses.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The FCA’s competition objective, as set out in section 1E of the Financial Services and Market Act 2000 (FSMA), requires the FCA to promote effective competition in the interests of consumers in markets for regulated financial services. Activities relating to cryptoassets do not constitute regulated financial services, except where a cryptoasset qualifies as a Specified Investment under the Regulated Activities Order or is e-Money. The FCA’s competition objective therefore does not apply with respect to most markets for cryptoassets. Where a cryptoasset is a Specified Investment or e-Money, the cryptoasset business should already have been registered with the FCA for anti-money laundering supervision, independently of the new supervisory regime for cryptoasset businesses.
The FCA’s decision to extend the Temporary Registration Regime for cryptoasset businesses to 31 March 2022 will allow firms that are currently on the temporary register to continue operating whilst their applications are assessed, and preserve consumers’ access to a range of cryptoasset firms in the intervening period. This strikes an appropriate balance between mitigating the risk of money laundering in the cryptoasset sector, and ensuring that cryptoasset businesses based in the UK, and the customers they serve, are not subject to undue disruption.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to section 1E of the Financial Services and Markets Act 2000 on the competition objective, what assessment he has made of the performance of the Financial Conduct Authority in respect of the anti-money laundering / counter terrorist financing registration of cryptoasset businesses.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The FCA’s competition objective, as set out in section 1E of the Financial Services and Market Act 2000 (FSMA), requires the FCA to promote effective competition in the interests of consumers in markets for regulated financial services. Activities relating to cryptoassets do not constitute regulated financial services, except where a cryptoasset qualifies as a Specified Investment under the Regulated Activities Order or is e-Money. The FCA’s competition objective therefore does not apply with respect to most markets for cryptoassets. Where a cryptoasset is a Specified Investment or e-Money, the cryptoasset business should already have been registered with the FCA for anti-money laundering supervision, independently of the new supervisory regime for cryptoasset businesses.
The FCA’s decision to extend the Temporary Registration Regime for cryptoasset businesses to 31 March 2022 will allow firms that are currently on the temporary register to continue operating whilst their applications are assessed, and preserve consumers’ access to a range of cryptoasset firms in the intervening period. This strikes an appropriate balance between mitigating the risk of money laundering in the cryptoasset sector, and ensuring that cryptoasset businesses based in the UK, and the customers they serve, are not subject to undue disruption.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, if he will give overall responsibility to the Financial Conduct Authority (FCA) for maintaining a well-functioning cash system; and what discussions his Department has had with the FCA on that matter.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government’s consultation on proposals for protecting access to cash for the long term will be open until 23 September 2021. Following the consultation, the Government will set out next steps for delivering on its commitment for legislating to protect access to cash.
The consultation is available at: https://www.gov.uk/government/consultations/access-to-cash-consultation.
As detailed in its consultation, the Government proposes that the Financial Conduct Authority (FCA) becomes the lead regulator for oversight of the retail cash system, including having responsibility for monitoring and enforcing new legislative cash access requirements. In adopting this approach, the Government intends that the Payment Systems Regulator (PSR) and Bank of England continue with their existing functions with regards to cash; coordinated actions by the FCA and PSR on cash as part of the COVID-19 response have shown that joint working between the regulators, at both strategic and operational levels, is working effectively.
The Government has, and continues to be, closely engaged with the FCA, PSR, Bank of England, and industry in developing its cash access proposals, including through the Joint Authorities Cash Strategy Group, which provides a forum for the public bodies to formally co-ordinate respective approaches to access to cash. The Group is chaired by HM Treasury and attended by the Bank of England, PSR, and FCA.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what the Government's timetable is for publishing a draft Bill on protecting access to cash in response to its consultation on legislative proposals; and what plans he has for how that draft legislation will relate to joint work by the Financial Conduct Authority, Payment Service Regulator and banking industry to protect access to cash.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government’s consultation on proposals for protecting access to cash for the long term will be open until 23 September 2021. Following the consultation, the Government will set out next steps for delivering on its commitment for legislating to protect access to cash.
The consultation is available at: https://www.gov.uk/government/consultations/access-to-cash-consultation.
As detailed in its consultation, the Government proposes that the Financial Conduct Authority (FCA) becomes the lead regulator for oversight of the retail cash system, including having responsibility for monitoring and enforcing new legislative cash access requirements. In adopting this approach, the Government intends that the Payment Systems Regulator (PSR) and Bank of England continue with their existing functions with regards to cash; coordinated actions by the FCA and PSR on cash as part of the COVID-19 response have shown that joint working between the regulators, at both strategic and operational levels, is working effectively.
The Government has, and continues to be, closely engaged with the FCA, PSR, Bank of England, and industry in developing its cash access proposals, including through the Joint Authorities Cash Strategy Group, which provides a forum for the public bodies to formally co-ordinate respective approaches to access to cash. The Group is chaired by HM Treasury and attended by the Bank of England, PSR, and FCA.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Written Statement of 15 December 2020, HCWS652, what steps he has taken to phase out unconscious bias training in his Department.
Answered by Kemi Badenoch - President of the Board of Trade
The Government does not believe that such training achieves its intended aims, and after the announcement in December, the Treasury removed all unconscious bias training and reference to it from our online learning management system. We have also stopped this being mandatory training for new starters.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the time taken to manage the anti-money laundering / counter terrorist financing registration of cryptoasset businesses by the Financial Conduct Authority on the cryptoasset industry.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the time taken to manage to the anti-money laundering / counter terrorist financing registration of cryptoasset businesses by the Financial Conduct Authority on consumers.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the time taken to manage the anti-money laundering / counter terrorist financing registration of cryptoasset businesses by the Financial Conduct Authority on the international competitiveness and attractiveness of the UK.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, with reference to the Government’s consultation on the regulatory approach to cryptoassets and stablecoins, which closed on 21 March 2021, whether it remains the Government’s policy to create a regulatory environment in which cryptoasset firms can innovate.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.
Asked by: Philip Davies (Conservative - Shipley)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect of the time taken to manage the anti-money laundering / counter terrorist financing registration of cryptoasset businesses by the Financial Conduct Authority on the Government’s objective to create a regulatory environment in which cryptoasset firms can innovate.
Answered by John Glen - Paymaster General and Minister for the Cabinet Office
The Government is committed to retaining the UK’s global leadership position in fintech by creating a regulatory environment which promotes innovation whilst maintaining the highest regulatory standards, including for anti-money and counter-terrorist financing. Having an effective anti-money laundering and counter-terrorist financing regime underpins the competitiveness of British financial services firms and the UK as a whole, by providing confidence that our financial system is clean and safe, and that new technologies can be used both reliably and safely.
Any steps taken in light of the consultation on the Government’s regulatory approach to cryptoassets will aim to balance the potential risk to consumers with the ambition to foster competition and innovation in the sector.
In order to properly assess whether a cryptoasset firm meets the requirements for registration set out in the Money Laundering Regulations, the FCA are required to assess whether a firm and its officers, managers or beneficial owners are “fit and proper” with regard to the risk of money laundering or terrorist financing. The FCA are therefore assessing firms’ business models holistically, and it has been necessary, in many cases, for them to request additional information from the applicant firm. A significant reason for this has been that many applications have contained insufficient information on their business mode and evidence to demonstrate that the firm meets the required standard. The application process for cryptoasset firms has therefore taken longer than originally anticipated.
The mean length of time in days that a cryptoasset firm has had their application for registration under review by the FCA is 248 days. The median length of time in days that a company has had their application for registration under review is 252 days. The maximum length of time in days that a company has had their application for registration under review is 527 days.
The Government believes that the FCA’s expertise in the regulation of financial products, its membership of the Cryptoasset Taskforce, and its experience as anti-money laundering supervisor for other asset-based financial services firms makes it the right supervisor for the cryptoasset sector. As a result of the longer than anticipated time being taken to process applications, I can confirm that the FCA has increased considerably the resources allocated to assessing applications.