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Rishi Sunak’s financial services ‘green future’ explained

16 November 2020: The Chancellor has set out the government’s plans to make the UK a world-leader in green finance and financial technology.

This week, UK Chancellor of the Exchequer Rishi Sunak set out his vision for the nation’s financial services sector post-Brexit. Since the referendum, there have been fears that UK financial services and their access to the EU market might be undermined without close alignment with the EU. The Chancellor’s announcement opens the door for EU financial services firms to access the UK and sets out a plan to position UK financial services as a leader in sustainable, pioneering finance. 

“We are starting a new chapter in the history of financial services and renewing the UK’s position as the world’s pre-eminent financial centre,” The Chancellor said in a statement. “By taking as many equivalence decisions as we can in the absence of clarity from the EU, we’re doing what’s right for the UK and providing firms with certainty and stability.”

The plans comprise of four main areas: 


Equivalence has been one of the biggest concerns for UK financial services post-Brexit. The EU requires regulatory equivalence from other nations if financial services firms are to provide services into Europe. There have been questions as to whether the UK will be granted equivalence by the EU post-Brexit, with a lack of clarity as of now. The Chancellor’s statement made it clear that EU financial services companies can provide their services into the UK.

“It’s a move that puts the onus on the EU to give the UK equivalence,” says John Mongelard, Risk and Regulation Manager for ICAEW’s Financial Services Faculty. “It sends a message that ‘our doors are open’. As a member state we were – and still are – an equivalent regime, so speaking objectively, that fact pattern does not change at midnight on 31 December. However, as we know facts and politics can often clash.”


The government is launching a call for evidence on the UK’s overseas regime. It is also establishing a taskforce to propose reforms to the UK listings regime to attract more overseas companies into the UK. The government will also publish a consultation on reforming the UK’s funds regime and plans to set up the UK’s first Long-Term Asset Fund within a year.


The Chancellor set out the goal for the UK to be the world leader in financial technology. He proposed a new regulatory approach to digital currencies – specifically stablecoin initiatives to ensure they meet the same minimum standards of other payment methods. HM Treasury and the Bank of England will also consider how central banks could issue digital currencies as complementary to cash.

The COVID-19 pandemic has facilitated a shift away from cash towards contactless, which opens up the potential prevalence of cryptocurrencies in future.

This also links to the equivalence argument, says Mongelard. “This gives the UK another area to lead globally if its financial services firms are not able to access Europe.”


The UK government also wants to lead on climate change in financial services and has set out plans to mandate Taskforce of Climate change-related Financial Disclosures (TCFD) aligned disclosures for large companies and financial institutions by 2025. It also plans to implement a new green taxonomy for determining which activities can be defined as environmentally sustainable. Subject to market conditions, the UK will also issue its first-ever Sovereign Green Bond next year.

The world and the UK often lack detailed and robust data on businesses’ climate impacts and initiatives, Mongelard explains. By mandating TCFD-aligned disclosures, the UK creates the impetus to build that data. The green taxonomy plan is also a big step: “We have historically seen a lot of greenwashing. This green taxonomy can shed some light on what activities are genuinely green, and create some red lines around certain, less environmentally friendly activities. 

“This is an important area of focus for our members. These rules will establish what, say a green bond really is. Accountants and assurance providers are best placed to check whether the rules are being followed and whether the guidelines are being met.”