Treasury Committee launches sub-committee to scrutinise FCA and PRA proposals
New committee will be 'devoted to the scrutiny of financial regulations and underpinned by a new and well-resourced unit', Mel Stride MP says
Launch of new committee comes as the number of regulatory initiatives is likely to grow as regulators assume additional responsibilities following the UK’s exit from the EU
The UK parliament’s Treasury Committee has launched a sub-committee to scrutinise regulatory proposals for financial services.
The new sub-committee on financial services regulations will take the lead on scrutiny of financial regulatory proposals from the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
It comes as the number of regulatory initiatives is likely to grow as regulators assume additional responsibilities following the UK’s exit from the EU, which will require new forms of scrutiny, the Treasury Committee said in a new report.
The sub-committee will be chaired by Mel Stride MP and will, initially, consist of all the members of the Treasury Committee.
“Our approach will be targeted and flexible, with the new sub-committee devoted to the scrutiny of financial regulations and underpinned by a new and well-resourced unit of experts and specialists,” Stride said.
The Treasury Committee said it would be most effective to intervene at the consultation paper stage of the regulatory proposal process, where proposals have crystallised into draft texts but when there is “clear scope for influence”.
As part of this, a financial services scrutiny unit is being formed to offer advice to the sub-committee on the likely impact, fitness for implementation and level of appropriate scrutiny for each proposal.
The sub-committee will consider questions such as a whether a policy is justified and desirable and whether a regulator is acting within its delegated powers.
“Following the UK’s exit from the EU, our regulators have assumed significant new responsibilities. Those will require scrutiny and parliament has an opportunity to put in place a process that is less bureaucratic and significantly more nimble than was previously the case in the EU,” Stride said.
The sub-committee will commence its work by scrutinising the PRA’s proposals for a “strong and simple framework”, which would amount to a significant change in prudential policy applying to banks and building societies.
It plans to invite written submissions and take oral evidence on the proposals.