Our Financial Services Regulatory (FSR) team surveys the regulatory landscape in 2021 and identifies some themes that we expect to be at the core of regulatory priorities globally in the next 12 months.
2020 has been dominated by Covid-19, political uncertainty, and the preparations for Brexit – which are likely to continue to cast a long shadow over 2021. Although some second-guessing of crisis-driven responses is probably inevitable ("2020 hindsight"), the hope is that regulators will also focus on the benefits and opportunities furnished by the adoption of digital solutions in response to the pandemic, and how the financial system can best help support the global economic recovery.
Our Global Outlook for 2021 looks at nine different areas, ranging from doing something useful about culture and tackling the "alphabet soup" of ESG standards, to maintaining market integrity in the time of Covid-19, and the final countdown for LIBOR. Protecting investors through a focus on end outcomes, managing innovation in payments, and ensuring digital operational resilience are of course high on the list. Perhaps unsurprisingly, part of the regulatory response to 2020's pandemic has been a trend towards increased regulatory intervention, and we expect the number of investigations against individuals to continue to grow, not least given continuing regulatory focus on making senior managers accountable.
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© Herbert Smith Freehills 2021