Karl Foster speaks with Law360 over impact of UK capital market deregulation

The UK government’s sweeping deregulation efforts to revive capital markets and stimulate economic growth are facing increasing scepticism from legal and financial experts, according to a recent Law360 article. While reforms such as simplified share listing rules, deregulation of research payments, and revised consumer protection requirements aim to boost market competitiveness, many in the legal community question whether these steps go far enough – or in the right direction.

The new rules, including those introduced by the Financial Conduct Authority (FCA), are designed to align the UK more closely with U.S. capital markets. However, with only four new share issues in the UK this year compared to 75 in the U.S., doubts persist about whether regulatory streamlining can truly address deeper market challenges such as liquidity and investor confidence.

A major point of contention is the Consumer Duty, introduced in 2023, which places responsibility on firms to deliver “good outcomes” for retail customers. Critics argue it is too broad and burdensome – especially when applied to wholesale firms that don’t directly interact with retail clients.

Partner Karl Foster weighed in on the issue:

“Given that a layer of protection exists as the party interacting with the consumer will need to demonstrate good customer outcomes, the requirement for the similar demonstration in respect of the indirect involvement of the wholesale firm overlaps and distracts from its aims.”

It is suggested the FCA could address this by issuing a simple clarification, which could help restore the UK’s competitiveness – yet no such proposal has been made to date.

You can read the full article at Law360 behind a paywall here: Doubts Grow Over Impact Of UK Capital Market Deregulation