Britain’s Sunak accepts call for financial reforms after Greensill

(Reuters) -British finance minister Rishi Sunak has ordered two immediate reviews of the country’s financial regulation related to the collapse of supply chain finance firm Greensill Capital.

In a letter to a parliamentary committee that issued a report in July related to Greensill’s collapse, released on Friday by the same committee, Sunak said he had accepted its call for reform of the mechanism used by Greensill, known as the “appointed representatives regime”.

Sunak said in the letter, first reported by the Financial Times, that the Treasury had already started to review the regime, including legislative reforms to strengthen the oversight of appointed representatives to prevent opportunities for abuse of the system.

Regarding reforms of the regulatory regime surrounding changes of control of banks, Sunak said the Treasury is working with the Prudential (NYSE:) Regulation Authority and Financial Conduct Authority to consider how change of control applications are dealt with, and what changes might need to be considered.

Earlier this month, financial regulators said trade finance firms must do more to identify potentially suspicious activities undertaking additional risk assessments.

Greensill Capital’s collapse earlier this year highlighted risks in the $1.3 trillion supply chain finance business.

The parliamentary committee in July said former British Prime Minister David Cameron showed a lack of judgment in using personal contacts and informal channels to lobby for the now-collapsed Greensill Capital.

The committee did not call for making supply chain finance in general a regulated activity, but said the appointed representatives regime should be tightened up to reduce “opportunities for abuse”.

In May, Britain’s Financial Conduct Authority (FCA) said it was formally investigating the UK operations of Greensill as part of global probes.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible….



Read More: Britain’s Sunak accepts call for financial reforms after Greensill