City regulators set for fresh scrutiny as ministers push post-Brexit reforms
Ministers are looking to strengthen their oversight of the City’s financial regulators as part of post-Brexit plans to rein in regulatory red tape and make sure they help drive economic growth.
The Treasury is planning to table an amendment to the landmark Financial Services and Markets Bill, currently making its way through parliament, which would strengthen the role of the central complaints body, the Financial Regulators Complaints Commissioner (FRCC), which oversees regulators, a government source told City A.M.
The FRCC allows firms to complain about decisions dished out by the City’s key watchdogs, the Financial Conduct Authority, Prudential Regulation Authority and the Payments Systems Regulator.
The government is now looking to boost the powers of the body so it can more robustly hold regulators to account in a bid to push economic growth up regulators’ agendas.
Central to the plans will be allowing the Treasury to appoint the FRCC’s chief, rather than the regulators, to carve out more independence for the body from the regulators, the source told City PM
The body is currently led by commissioner Amadeep Somal, who was appointed in 2020 on a three year term by the Bank of England.
An annual report from the FRCC will also be given further weight and regulators will be required to answer where they have not fallen in line with the recommendations of the body. Treasury officials will also have the power to “direct the Financial Regulators Complaints Commissioner to include specific issues in their annual report,” the source said.
The Financial Services and Markets Bill is scheduled to begin the report stage in the House of Lords on the 6th June.
Moves to strengthen the FRCC come after a testy period between the government and the City’s regulators. Moves by the Treasury to introduce so-called call in powers, which would have given ministers greater control over their decision making, provoked a backlash from regulators. Rishi Sunak, however, eventually aborted the plans.
The flexibility to overhaul regulation in the City has been leant on by ministers as a key benefits of Brexit. The government has already changed the mandate of the regulators to include a ‘secondary objective’ of growth and competitiveness when making decisions.
Plans to overhaul the role of the FRCC were first reported by the Sunday Times. The FCA declined to comment. The PSR and PRA did not immediately respond to requests for comment.