Britain’s Sunak to tighten financial regulations after Greensill scandal -FT By Reuters


© Reuters. FILE PHOTO: British Chancellor of the Exchequer Rishi Sunak in London, Britain September 7, 2021. REUTERS / Toby Melville / File Photo

(Reuters) – UK Finance Minister Rishi Sunak has ordered two immediate reviews of UK financial regulations linked to the collapse of supply chain finance firm Greensill Capital, the Financial Times reported on Friday.

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

Sunak said he had previously asked the UK Treasury to review the scheme, including legislative reforms to strengthen oversight of appointed representatives to avoid the risk of abuse, the newspaper said.

Earlier this month, financial regulators said trade finance companies need to do more to identify potentially suspicious activity by undertaking additional risk assessments.

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

The parliamentary committee said in July that former British Prime Minister David Cameron had shown lack of judgment in using personal contacts and informal channels to lobby for the now collapsed capital Greensill.

The committee did not call for making general supply chain finance a regulated activity, but said the designated representative regime should be strengthened to reduce “opportunities for abuse.”

In May, Britain’s Financial Conduct Authority said it was formally investigating UK operations in Greensill as part of global investigations.

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