Chancellor Reeves to Unveil Major Reforms in Financial Services Industry

Rachel Reeves will use her Mansion House speech to call for a significant increase in risk in financial services, with looser regulation and a new "Tell Sid" campaign to persuade the public to buy shares. The chancellor's proposals aim to boost growth and deliver better returns for the public by increasing investment in stocks and shares. Reeves will also announce plans to give individuals the information and support they need to start investing in stocks and shares, moving away from cash savings.

Key Takeaways:

• Chancellor Reeves will unveil the biggest set of reforms to financial regulation in a decade, with a focus on increasing risk and promoting investment in stocks and shares.
• The reforms include a significant relaxation of regulations, allowing companies to raise more money from secondary share issues without needing to publish a prospectus.
• The Financial Conduct Authority will increase the threshold for follow-on share issues from 20% to 75% of a company's existing equity, saving companies £40m a year.
• The regulator will also help companies go public faster by shortening the minimum time between a prospectus publication and an initial public offering from six to three days.
• Unlisted companies will be able to sell more than £5m of shares or bonds without issuing a prospectus using a new platform for public offers framework.
• The FCA will also cut the disclosure requirements on smaller bond issues worth less than £100,000, making it easier for companies to sell debt to retail investors.
• Mortgage lenders are being encouraged to take more risk under recent proposals made by the Bank of England and FCA.
• The chancellor will launch a campaign to support "popular capitalism" and encourage the public to buy shares in the UK.
• Wealthy individuals are warning that further tax increases could prompt them to leave Britain, with some having already left following the government's abolition of the non-dom tax regime.

Statistics:

• £40m: The estimated annual savings that companies will make following the increase in the threshold for follow-on share issues from 20% to 75%.
• 20%: The current threshold for follow-on share issues, which will be increased to 75%.
• 75%: The new threshold for follow-on share issues, allowing companies to raise more money without needing to publish a prospectus.
• £5m: The amount of shares or bonds that unlisted companies can sell without issuing a prospectus using a new platform for public offers framework.
• £100,000: The amount of smaller bond issues that will have reduced disclosure requirements.
• 10,000: The number of first-time home buyers who will be supported by a new loan guarantee scheme.
• £30,000: The minimum income required for individuals to access Nationwide's Helping Hand mortgages.

Sources:

• Rachel Reeves, Chancellor of the Exchequer
• Financial Conduct Authority (FCA)
• Bank of England
• UK Finance
• The Financial Times
• Mansion House speech