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| 1 minute read

HMT update on the Smarter Regulatory Framework

On 21 March 2024, HMT published a note on the next phase of the Smarter Regulatory Framework.

What is the Smarter Regulatory Framework (SRF)?

The SRF is the process announced in December 2022 (as part of the Edinburgh Reforms) whereby assimilated law (referred to previously as retained EU law) will be replaced by rules determined by the financial regulators. It is enabled by the Financial Services and Markets Act 2023. The SRF divides assimilated law into tranches.

Tranches 1 and 2

In its July 2023 paper ('Building a Smarter Financial Services Framework for the UK: HM Treasury’s Plan for Delivery'), HMT considered the workstream involving Tranche 1 and Tranche 2 of the SRF. Highlights of this work include the replacement of the Prospectus Regulation and Solvency II, MiFID II/MiFIR reforms and initial work on the Payments Services regime. The government has also started the process to repeal the Insurance Mediation Directive and Insurance Distribution Directive (IDD) and has published draft legislation that will repeal the Packaged Retail and Insurance based Investment Products Regulation (PRIIPs). 

Tranche 3   

HMT's latest update sets out the inventory of Tranche 3 of the SRF, which includes:

  • the Alternative Investment Fund Managers Directive (AIFMD)
  • Undertakings for Collective Investment in Transferable Securities Directive (UCITS)
  • further work on the Payment Services and E-money regime
  • the European Market Infrastructure Regulation (EMIR), starting with provisions dealing with central counterparties
  • further work on MiFID II, including organisational requirements and operating conditions for investment firms
  • those parts of the Capital Requirements Regulation (CRR), which are not related to Basel 3.1 implementation
  • the Equivalence Determinations Regulations.

Keeping stakeholders informed

The government says it will use ‘existing and familiar communication platforms’ to help industry plan and adapt to the changes involved in the SRF. This includes the Regulatory Initiatives Grid and the government's dedicated SRF webpage, which has links to the most recent announcements, policy papers, and statutory instruments that have been published in draft for technical feedback ahead of being laid before parliament.   

The government will set out its approach to the remaining elements of assimilated law and any additional tranches in due course.

Help is at hand

Our team has significant experience in assisting firms with adapting to changes in regulation and can help you develop regulatory change programmes related to the implementation of the SRF.


financial institutions & insurance, financial services regulatory