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We just need to get you Tigger-ized

The UK Govt. Taskforce on Innovation, Growth and Regulatory Reform (TIGRR) published its report 16 June 2021. While it bears no formal relationship with the much beloved AA Milne, possibly later lamented Disney character, the acronym is obviously too tempting- “It’s a dangerous path I bounce… but I bounce it alone. Because the Hundred Acre Wood needs a hero, Pooh Bear! And I’m the only one”. The 130 page document has an extensive remit, with proposals ranging from “superfoods” to future transport and energy- production technologies. Given the financial sector’s centrality to the UK economy, the report unsurprisingly contains a number of recommendations for the industry. Although these are only at the proposal stage and would require Governmental review and implementation; to the extent that it supports similar suggestions, the report is a useful guide to the post-Brexit emerging regulatory landscape. The report’s primary financial services proposals are summarised below:

  • Overall Regulatory Framework. The TIGRR believes the EU-imposed, codified regulatory environment has become overly re- and pre-scriptive, its “insidious effect” stifling UK innovation and productivity. The TIGRR recommends a return to a more adaptive, principles and outcome-based common-law framework, reducing bureaucracy, highlighting proportionality and increasing regulatory agility. While this effectively amounts to a buzz word wishlist, the underlying theme is de-regulation
  • Digital Currency. TIGGR points to initiatives in China, Singapore and Germany and urges the UK to accelerate plans for the introduction of a Central Bank Digital Currency, with the aim of launching a pilot within 12-18 months
  • MiFID II– the TIGRR report highlights MiFID II as a particularly egregious example of disproportionate EU bureaucratic overreach. It recommends the revision of disclosure and transparency requirements, and the removal of the requirements to provide costs and charges reports to professional investors and extensive amendment to the position limits regime. Given that the EU’s MiFID Quick Fix recommends the suspension of RTS 27 reporting, this may not be the best example of bureaucratic rigidity
  • PRIIPs– TIGGR recommends that Key Information Disclosure requirements only apply to complex products that mandate the need for extra information to retail investors, therefore vanilla securities should not be included in the regime. The TIGGR believe generally that the  PRIIPs reporting format should be less prescriptive when aimed at professional investors. While making explicit reference to the PRIIPs regime, the report also calls for a more proportionate ( read- relaxed) approach to other reporting regulations such as the Deposit Guarantee Scheme, the Mortgage Credit Directive, and Cross- Border Payments
  • MAR- TIGGR proposes that the “investment recommendation” disclosure requirements under the MAR should not be applicable to wholesale clients, are burdensome and costly and are not supported by the intended buy-side audience. They therefore recommend their removal
  • GDPR- the existing GDPR is seen as inflexible and overly prescriptive and that individual compliance has become a literal tick box exercise. It recommends the removal of Art. 22 GDPR- relating to automated decision-making, to be replaced by a set of tests that assure automatic profiling meets a legitimate or public interest. Greater focus should be placed on a citizen’s ownership of their data, with the possible creation of Data “Trusts” or “Fiduciaries”. This section of the report is high on hope, but low on detail. The main thrust seems to be to empower AI applications, while increasing individual data ownership. There is a nascent anti-Big Tech trend that may provide some support to the second half of this oxymoron
  • Challenger Banking– TIGGR recognises that the Challenger Banks haven’t mounted much of a challenge to date. It believes that capital regulations are acting to prevent competition and that smaller banks should be benefit from simpler regulation. Like much of the report, this echoes other recommendations, specifically the PRA’s April  2021 discussion paper positing a simpler prudential framework for non-systemic banks and building societies.
  • Open Banking- TIGGR supports an extension to OPEN Banking by allowing more access to third party API’s, apparently facilitating more data–sharing in terms of credit-checks, pensions, mortgages, insurance etc. while retaining/enhancing citizen data control.  They recommend the “Australian” model and reference the Khalifa Review
  • FinTech generally- unsurprisingly obviously not “prescriptively” supportive. If the UK “wants to retain its Fintech Crown”  the TIGGR believes it is vital that Smart Data legislation is accelerated and at the least, the nine biggest banks are forced to open access to their data

The Prime Minister responded to the report in a cheerleading letter “Your report shows what a fully sovereign United Kingdom can achieve” etc. The TIGGR report is suitably bouncy and optimistic; it points to further deregulation, but fails to address any details. It is however, a noteworthy addition to the UK Regulatory trend of travel diary.

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