Economic Secretary (): The government has today
laid before Parliament the second consultation on the Future
Regulatory Framework (FRF) Review, Financial Services Future
Regulatory Framework Review: Proposals for Reform (CP 548).
The FRF Review provides a once-in-a-generation opportunity to
ensure that, having left the EU, the UK establishes a coherent,
agile, and internationally respected approach to financial
services regulation that is right for the UK.
In his speech at Mansion House on 1 July 2021, the Chancellor set
out the government’s vision for an open, green and
technologically advanced financial services sector that is
globally competitive and acts in the interests of communities and
citizens across the UK. Delivering the outcomes of the FRF Review
is a key part of achieving this vision.
An initial consultation was published in October 2020. HM
Treasury received over 120 responses and has carried out
significant further engagement with the sector. The consultation
document laid today sets out the government’s response to the
feedback received, and the proposals to deliver the intended
outcomes of the FRF Review.
The consultation sets out a number of proposals to build on the
strengths of the UK’s existing domestic framework of financial
services regulation, including by:
- Ensuring that, as the Financial Conduct Authority (FCA) and
the Prudential Regulation Authority (PRA), take on greater
responsibility, their objectives continue to be appropriate. To
reflect the importance of the sector as an engine for growth
across the wider economy and the UK’s position as a global
financial centre, the government intends to introduce a new
secondary growth and international competitiveness objective for
both the PRA and the FCA.
- Moving to a system where the financial services regulators
take responsibility for setting many of the direct regulatory
requirements which were previously set by the EU, establishing a
comprehensive FSMA model of financial services regulation for the
UK. This will be achieved by repealing the majority of retained
EU financial services legislation, with the regulators given
powers to replace the current requirements with their own rules.
This will ensure a more agile regulatory framework for the future
while supporting the UK’s commitment to high standards of
regulation.
- Ensuring that there continues to be appropriate democratic
input into, and public oversight of, the regulators’ activities.
This means strengthening the mechanisms through which Parliament
holds the regulators to account and which underpin the
regulators’ relationship with HM Treasury, in addition to
proposals to improve stakeholder engagement in the regulatory
policymaking process.
This publication is available on www.gov.uk(opens in a new
tab) and will be open for responses until 9 February 2022.
Future Regulatory Framework Review: Proposals for Reform:
www.gov.uk/government/consultations/future-regulatory-framework-frf-review-proposals-for-reform
