On July 15, The Chancellor will be announcing the reforms of financial services, and as the date draws closer, more detail is being provided on what to expect. Key changes being proposed include:

• Pensions funds to be mandated to invest in UK private markets
• Ringfencing between investment and retail banks to be revised
• The launch of PISCES
• CARF to be applied to Crypto domestically

Financial Services constitutes 8.8% of the UK’s total economic output, and is the largest industry in the economy overall, equally since the UK left the EU, it has failed to grow. The new reforms aim to address that. Looking at the reforms proposed therefore:

Pensions funds to be mandated to invest in UK private markets: This is meeting heavy resistance from Pension Funds, with concerns regarding fiduciary duties that require them to act in the best interests of their customers.

Ringfencing between investment and retail banks to be revised: Nearly 20 years after Lehman Brothers the idea is that the reforms which were proposed and implemented then, are no longer relevant for the modern world, and this is un-necessarily depressing the sector. However, if these guardrails are removed, what does this mean for the sector going forward.

The launch of PISCES: The concept of PISCES, an exchange for privately owned companies to enable them to circumvent protracted due diligence processes by streamlining into a single LSE led approach, where the only investors are then regulated, is ground breaking conceptually – how effective it will be though will depend on market take up. This has the potential though to be explosive.

CARF to be applied to Crypto domestically: Crypto as an asset class has exploded into the public sphere and increasing numbers of people are now buying holdings. However, the nature of crypto means that for tax authorities, tracking who has what holdings, and ensuring capital gains are paid, is becoming an increasing problem. CARF is an initiative which will require Crypto exchanges to capture and pass information on the people involved in all transactions to HMRC. Watch this space!

In the meantime, Fintech continues to be the star performer in the industry, and as per our recent report with Morgan Mckinley, is outstripping the rest of the industry. If you would like to know more about the latest trends here, do download our report here: