The package of 30 reforms, including the scrapping of PRIIPs rules, were announced by the Chancellor last week.

Financial Planners, wealth managers, trade bodies and providers have given the proposals from Chancellor Jeremy Hunt a positive reception. 

The Chancellor says his ‘Edinburgh Reforms’ are designed to improve competition and growth post-Brexit by getting rid or or scaling back unnecessary legislation.

Mr Hunt wants 30 reforms of financial regulation and has written to Parliament, the FCA and other regulators and bodies to outline his plans.

Among the key reforms are:

• Repealing the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and consulting on a new direction for retail disclosure
• Issuing new remit letters for the PRA and FCA with clear, targeted recommendations on growth and international competitiveness
• Publishing a plan for repealing and reforming EU law using powers within the Financial Services and Markets to build a ‘smarter regulatory framework’ for the UK
• Commencing a review into reforming the Senior Managers & Certification Regime in Q1 2023
• From April 2023, improving the tax rules for Real Estate Investment Trusts
• Consulting on reform to the VAT treatment of fund management

The Chancellor has also just scrapped the 10% drop rule requiring planners and advisers to write to clients when portfolios drop by 10% or more.

The scrapping of PRIIPs - which deal with pre-investing information requirements such as Key Information Documents - has been particularly welcomed by the industry, with many saying the rules are not currently fit for purpose.

Simon Harrington, head of public affairs at wealth manager trade body PIMFA, said PRIIPs as they are currently seem directly in conflict to the upcoming Consumer Duty rules.

He said: “It is imperative that any disclosure framework is, in future, able to ensure that the end customer is provided with the right information, and in the right way, in order to better understand the, at times, complex decisions they are making.

“The framework, as it currently exists, does not do this and in places, seems directly in conflict with the Financial Conduct Authority’s broader aims of delivering higher standards of communication under the Consumer Duty. This is a welcome move both for retail consumers and the providers of services to them.”

Steven Cameron, pensions director at retirement provider Aegon, agreed that PRIIPs are not fit for purpose and that it should be for the FCA to determine an appropriate disclosure regime.

He said: “The FCA already sets out many detailed disclosure requirements for other products such as pensions. In addition, from next July, the new Consumer Duty will require firms to focus on delivering good outcomes to retail customers, with the ‘consumer understanding’ outcome covering all forms of communication.

“While the Treasury consultation surprisingly doesn’t mention the new Consumer Duty, the FCA will no doubt wish to design the replacement for PRIIPs disclosures in a manner consistent with this.”

Stephen Bird, CEO of asset manager Abrdn, welcomed the reforms as a chance to shake up how financial services are regulated in the UK.

He said: “Financial services is a critical enabler of any growth economy, we gather capital and put it to work to create better schools, hospitals and homes and when invested wisely, we assist in the long term provision for the futures of this and the next generation. 

“We need to see a mentality shift in the country overall that encourages innovation and partnership that delivers better outcomes for all citizens. 

“Regulation is important as a protection for all of us, but it has to be simpler and more thoughtfully designed to deliver the right outcomes with less bureaucracy.”

Hargreaves Lansdown said the changes to the prospectus regime were particularly welcome.

Anne Fairweather, head of government affairs and public policy at Hargreaves Lansdown, said: “Retail investors are significant shareholders in UK listed companies yet consistently get frozen out when companies raise more capital or when new companies list. Changes to the prospectus regime should focus on levelling the playing field for retail investors and remove unnecessary hurdles from their participation in these investment opportunities.”

Hargreaves Lansdown also welcomed the Chancellor’s commitment to reviewing the advice/guidance boundary.

Ms Fairweather said: “The Government has used today’s package of measures to underline this week’s commitment to reviewing the advice/guidance boundary. The review will be a game changer to allow firms to do all that they can to help people manage their finances better and rebuild their financial resilience over the longer term.”

Wealth manager Quilter Cheviot welcomed the reforms to the tax rules governing real estate investment trusts (REIT) announced as part of the Edinburgh Reforms.

Oli Creasey, head of property research at Quilter Cheviot, said: “The amendment of the REIT rules will simplify transactions by opening some of the loopholes already in use across the industry rather than trying to close them.

“For example, there are several companies listed on the relatively new property stock exchange IPSX which are ‘single property’ REITs. In the past they have gotten around current legislation by claiming that because the assets have multiple tenants, they can be considered multiple, separate properties. Allowing large, single buildings to be treated in this way ends the uncertainty over whether this approach is correct and is a boost to property companies looking to list vehicles of this nature.

“Our main concern would be that properties valued close to the £20m threshold would need to be carefully considered – a drop in value could cause the vehicle to fall outside the regime, with the tax implications that would come as a consequence.”