# Factbox-UK aims to strengthen London as a global financial centre Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-01 Category: FINANCE Category URL: https://financedigest.com/category/finance Meta Title: UK Finance Ministry Announces Capital Markets Reforms Meta Description: Discover the latest reforms set out by Britain's finance ministry to enhance the City of London's global appeal post-EU exit, from insurance capital URL: https://financedigest.com/factbox-uk-aims-to-strengthen-london-as-a-global-financial-centrehtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-01t142612z1lynxnpeh602hyrtroptp4britain-eu-banks-1736838245299-compressed.jpg) LONDON (Reuters) – Britain’s finance [ministry](https://www.financedigest.com/italys-industry-ministry-reports-heavy-cyberattack.html) set out reforms to capital [markets](https://www.financedigest.com/daimler-truck-q1-sales-drop-13-as-markets-normalize.html) on Thursday to sharpen the City of London’s global attraction after leaving the European Union. Below are details of what was announced to amend a welter of financial rules inherited from the EU: INSURANCE CAPITAL RULES The [ministry](https://www.financedigest.com/italys-industry-ministry-reports-heavy-cyberattack.html) said there is a compelling case to amend insurance capital rules known as Solvency II. It said there is a strong case to change the “risk margin” and “matching adjustment” rules, and to cut the burden of how [insurers](https://www.financedigest.com/different-countries-different-insurance-cultures-how-insurers-can-adapt-their-products.html "insurers") calculate their core solvency capital requirement. The Bank of England has been asked to [“model” different options to better understand](https://www.financedigest.com/10-ways-to-make-your-financial-model-easier-to-understand.html "10 Ways to Make Your Financial Model Easier to Understand") which combination of changes were needed, with a “comprehensive package of reforms” put out to public consultation in early 2022. [STOCK AND DERIVATIVES TRADING](https://www.financedigest.com/stock-trading-platforms-for-beginners.html "Stock Trading Platforms for Beginners") The [ministry](https://www.financedigest.com/italys-industry-ministry-reports-heavy-cyberattack.html) set out proposals to reform securities trading rules known as MiFID II, such as a more flexible definition for a trading venue to [remove](https://www.financedigest.com/bank-of-england-removes-paintings-of-governors-linked-to-slave-trade.html "Bank of England removes paintings of governors linked to slave trade") barriers to entry as trading technology advances. To encourage more smaller companies with a [market](https://www.financedigest.com/daimler-truck-q1-sales-drop-13-as-markets-normalize.html) capitalisation of below 50 [million pounds](https://www.financedigest.com/incentive-qas-expands-retail-portfolio-with-million-pound-shopping-centre-contract.html "Incentive QAS Expands Retail Portfolio With Million Pound Shopping Centre Contract") to list, a new category of trading venue with lighter regulatory requirements will be explored. To [minimise the impact of outages](https://www.financedigest.com/how-financial-institutions-can-minimise-the-risk-of-it-outages.html "How financial institutions can minimise the risk of IT outages") at exchanges, there will be consideration of a “playbook” for [markets](https://www.financedigest.com/daimler-truck-q1-sales-drop-13-as-markets-normalize.html) to follow when there is an outage. Rules for “systematic internalisers” or in-house trading of shares at [banks will be simplified to cut costs](https://www.financedigest.com/factbox-global-banks-take-axe-to-jobs-as-cost-pressures-mount.html "Factbox-Global banks take axe to jobs as cost pressures mount"). A [cap on “dark” or off-exchange trading](https://www.financedigest.com/belgium-supports-energy-price-caps-suspending-trading-in-eu-power-crunch.html "Belgium supports energy price caps, suspending trading in EU power crunch") is to be scrapped. The so-called share trading obligation, which requires trading of shares to be on a platform recognised by UK regulators, is to be scrapped to allow trading on any UK or overseas venue to “get the best price. Proposals are set out to [limit the scope](https://www.financedigest.com/digital-euro-will-be-free-but-limited-in-scope-ecb-says.html "Digital euro will be free but limited in scope, ECB says") of the trading obligation for derivatives. [COMMODITY MARKETS](https://www.financedigest.com/allen-overy-launches-commodity-finance-market-report-2018.html "Allen & Overy launches Commodity Finance Market Report 2018") Currently, regulators impose limits on how much of a commodity any single market participant can hold to avoid price manipulation. The government is proposing revoking the requirement for position limits to be applied to all exchange traded contracts, and to transfer the setting of position controls from the [Financial Conduct Authority to trading](https://www.financedigest.com/data-centres-and-the-changing-financial-trading-landscape.html "Data centres and the changing financial trading landscape") venues. An easing of rules is outlined for units of big energy and other [firms where trading in commodity](https://www.financedigest.com/sp-global-acquires-firm-to-bolster-capability-to-track-commodity-shipments.html "S&P Global acquires firm to bolster capability to track commodity shipments") derivatives is “ancillary” and not a core part of the company. Specific rules for [“oil market participants” in commodity](https://www.financedigest.com/commodities-trading-houses-help-keep-russian-oil-flowing.html "Commodities trading houses help keep Russian oil flowing") derivative markets could be scrapped. [FIXED INCOME](https://www.financedigest.com/ipc-and-transficc-announce-collaboration-on-fixed-income-and-derivatives-connectivity.html "IPC and TransFICC announce collaboration on fixed income and derivatives connectivity") TAPE The ministry wants a “consolidated tape” single feed of all [bond prices across trading venues to give investors](https://www.financedigest.com/investors-flee-uk-bonds-pushing-gilts-to-huge-monthly-loss.html "Investors flee UK bonds, pushing gilts to huge monthly loss") a snapshot of markets, but prefers a market-led solution to a mandatory tape although both options are being looked at. It is [seeking views on potential changes to the law](https://www.financedigest.com/eu-seeks-deal-on-law-preventing-import-of-deforestation-linked-goods.html "EU seeks deal on law preventing import of deforestation-linked goods") to allow a tape to be created. PROSPECTUSES The ministry [proposes an overhaul of the information document published by companies](https://www.financedigest.com/luc-remont-proposed-as-new-boss-of-french-energy-company-edf.html "Luc Remont proposed as new boss of French energy company EDF") wanting to list, to encourage more floats by simplifying the rules and cutting duplication. It proposes that the two regulatory issues, admissions of securities to [stock markets and public offer rules](https://www.financedigest.com/stocks-advance-u-s-dollar-retreats-as-china-drops-quarantine-rule.html "Stocks advance, U.S. dollar retreats as China drops quarantine rule"), are dealt with separately in future. The [government proposes removing the rule](https://www.financedigest.com/italys-rightist-government-tightens-rules-for-migrant-rescues.html "Italy’s rightist government tightens rules for migrant rescues") that it is a criminal offence to request admission to trading prior to a prospectus being published. The [Financial Conduct Authority would instead be given new rule-making responsibilities on admissions to trading](https://www.financedigest.com/finance-frictionless-trade-and-the-brexit-paperwork-boom.html "Finance, frictionless trade and the Brexit paperwork boom"). Less stricter rules are proposed on making forward looking statements in prospectuses. [Alternatives are being considered](https://www.financedigest.com/eu-considers-ban-on-forever-chemicals-urges-search-for-alternatives.html "EU considers ban on ‘forever chemicals’, urges search for alternatives") to the requirement for a prospectus when a private company offers securities that are not admitted to a stock exchange. Ideas are being sought for [easing the requirement on companies already listed overseas wanting to offer shares](https://www.financedigest.com/asia-shares-ease-euro-slugged-by-energy-crisis.html "Asia shares ease, euro slugged by energy crisis") in the UK. (Reporting by Huw Jones, Editing by Timothy Heritage) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---