The Chancellor today set out his vision for “an agile and dynamic approach to regulation that supports the growth of the UK economy” in proposals for a new financial regulators’ framework, an essential step to ensuring the UK regains its position as the world’s leading international financial centre in the next five years.
The plans include new statutory secondary objectives for the PRA and the FCA, requiring them to consider both the implications for growth and international competitiveness of their regulations, as well as their existing objectives of maintaining market integrity, consumer protection and a sound financial system.
Parliament and HM Treasury will also receive strengthened scrutiny and oversight over the FCA and PRA, appropriate to the increased rulemaking powers received by the regulators.
Responding to the announcement, Miles Celic, Chief Executive Officer, TheCityUK, said,
“This positive vision set out by the Chancellor will enable regulators to continue to promote high standards while also enabling the UK to remain internationally competitive, innovative and meet the needs of households and businesses. The UK must strive to bring greater agility and dynamism to how we approach regulation to ensure we remain nimble, innovative, and competitive over the long term.
“These proposals mirror much of what the industry has been calling for, including the increased powers for Parliament in reviewing regulation. However, urge the Chancellor to take this even further, committing to a regular independent review of the UK’s financial regulatory regime to ensure that the rules are proportionate, coherent, and achieve their stated goals in the most efficient way possible.”
“The UK’s financial and related professional services industry is a national asset. It’s Britain’s biggest net-exporter, its largest taxpayer, and an employer of 2.3 million people, two thirds of whom are outside London. This success is underpinned by strong and effective supervision by UK regulators, but we cannot be complacent. We look forward to engaging positively with this consultation in the weeks and months ahead.”
The Chancellor’s proposals align with the recommendations put forward by the International Regulatory Strategy Group and with the goals put forward in the industry’s international strategy.