The government has confirmed it plans to change the law to require the Bank of England’s Prudential Regulation Authority (PRA) to focus more on the financial sector’s global competitiveness, as part of today’s wider-ranging reforms.
Jeremy Hunt has also written to Nikhil Rathi, CEO of the Financial Conduct Authority, (the City regulator) outlining how the FCA’s remit will be widened to cover “the international competitiveness of the UK economy – including in particular the financial services sector – and its growth in the medium to long term”.
The existing Financial Services and Markets Act 2000 will be amended to give the FCA a secondary remit to “facilitate, subject to aligning with relevant international standards, the international competitiveness of the UK economy (including in particular the financial services sector)“.
The idea is to tailor financial services regulation to “bolster the competitiveness of the UK as a global financial centre and deliver better outcomes for consumers and businesses”.
Responding to the Edinburgh Reforms published this morning and ahead of the Chancellor’s speech this afternoon, Chris Woolard, UK Financial Services Regulation Leader at EY, comments: “The Chancellor has announced a wide-ranging plan of reform for financial services regulation, with a clear focus on the UK’s international competitiveness. The removal of PRIIPs and its replacement with a UK regime is the major announcement from a post-Brexit perspective, and the next phase in the development of a regime for digital assets is signposted. Another key area is the proposed change to ringfencing which, depending on the detail to be announced, could be substantive for some banks.
“Although the Treasury has published a number of documents alongside the announcement, the impact of these reforms depends upon the significant detail that remains to be seen or developed in the coming months.”