Britain uses Brexit to change finance.

BIG BANG 2.0?

Not quite, but it reflects a flip in the regulatory pendulum from years of boosting bank capital requirements and enforcing consumer safeguards to tweaking laws for Britain after Brexit.

Initially branded Big Bang 2.0 on the same scale as 1980s share trading reforms, the revisions are now called the "Edinburgh Reforms" after the city where finance minister Jeremy Hunt presented them.

The administration has toned down its language, stating there would be no 'race to the bottom,' huge departure from international norms, or removing investor protections. Instead, authorities should help the financial sector's international competitiveness.

Hunt said it's inappropriate to label the measures a Big Bang given the need to avoid 'unlearning' lessons from the 2008 global financial crisis and emphasized regulator independence.

"The city opposes deregulation. Alasdair Haynes, CEO of Aquis stock market, said today's announcements signal evolution, not revolution.

WHY RING-FENCE?

Britain eased capital rules for insurers and is now targeting banks.

Since January 2019, banks must protect their deposit-taking arms with capital against risky activity.

Smaller banks say the laws make it difficult to compete with larger lenders in the mortgage sector. The government will alter rules based on a review it commissioned.

Mid-2023, the government will consult on exempting banks without large investment banking activity and raising the ringfencing deposit threshold from 25 billion to 35 billion pounds.

ARE BANKERS CLEARED?

It's not pre-crisis "light-touch."

The administration declared it will lift an EU cap on banker bonuses, however other bonuses restrictions will remain.

Britain enacted laws in 2016 to hold senior bankers and insurers directly accountable for their actions after few were penalized for misconduct that led to the global financial crisis.

It was feared as a way to shame bankers by putting "heads on sticks," but there have been few investigations or enforcement cases. Bankers complain regulators delay key hires.

The government will examine the senior management and certification regime in the first quarter of 2023.

Markets?

As London tries to catch up to New York in listings, there will be many reviews.

Rules on short-selling, or stock bets, are being reviewed. The administration wants to replace the EU-era "PRIIPs" investment guide with a new framework.

An industry taskforce will explore the case for lowering the time it takes to settle a stock trade from two working days to one.

Companies' listing prospectuses and securitization rules will be reformed.

The government commits to creating a "consolidated tape" by 2024 so investors can compare prices across trading platforms.

The government will act on recommendations to improve how listed firms raise capital.

EU rules requiring brokers to itemize fees for stock selection research and order execution will be reviewed. The EU has already partially repealed this requirement. Trials of an intermittent wholesale market venue will increase companies' access to financing before becoming public.

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