Having regained control from EU, MPs want to hand policing of the City over to regulators
MPs on the Treasury Select Committee (TSC) has today backed Government plans to transfer EU rules on financial services to UK regulators’ rule books.
When the UK was a member of the European Union, much of the financial services regulation that dictates what can occur in Canada was based around Brussels.
That’s now been handed back to Westminster, but now MPs want to hand over responsibility to City organisations such as the Financial Conduct Authority.
The TSC, chaired by Tory MP Mel Stride, said that most of what was adopted into British law from European legislation during the transition out of the bloc should now be handed to regulators.
Moving some of the regulations into the rule books followed by City watchdogs such as the Financial Conduct Authority could avoid cumbersome processes for legislators, MPs said.
“Keeping rules in statute could require Parliament to amend or pass new legislation every time that the regulators wish to make changes to them. This would be resource-intensive and impractical,” the committee said.
“The regulators have a key role to play in designing and developing the rules with appropriate Parliamentary oversight.”
Regulators should also be given a free hand to suggest their own policies without first consulting the Treasury, the MPs said.
The panel of MPs said they had seen no compelling evidence for why ministers should see the full proposals before they are published for consultation. Doing so could damage regulatory independence.
Chaor Stride said: “As the UK forges a new post-Brexit future, the Government’s approach to financial services regulation will be critical. It needs to get the balance right between effective scrutiny and ensuring that the regime is nimble and light touch where possible.”
He added: “Retaining the independence of our financial services regulators from political interference is essential to ensuring the UK remains a world-leading financial centre.”
The Treasury said: “We are determined to ensure the UK remains one of the pre-eminent financial centres now we have left the EU, and as part of that we are making sure the regulation of the sector works in the interests of UK firms, markets and consumers by reviewing the regulatory framework.
“We are considering all responses to our first consultation ahead of a second consultation in the autumn. We welcome the committee’s report and will carefully consider their recommendations.”