Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether she is taking steps to review the oversight mechanisms of the Financial Conduct Authority.

The government and Parliament exercise oversight over the Financial Conduct Authority (FCA) in a number of ways, including through the government’s remit letters, which set out elements of the government’s economic policy to which the FCA must have regard, and parliamentary scrutiny of the FCA’s Annual Reports. Senior representatives of the FCA also regularly give evidence to parliamentary committees, where the FCA’s performance and operational effectiveness is scrutinised.

The government is currently consulting on a number of proposed targeted changes to the regulatory environment for financial services, designed to support the government’s overall ambition to ensure that regulation supports growth, is targeted and proportionate, is transparent and predictable, and adapts to keep pace with innovation.

The consultation includes a proposal to require the FCA and the Prudential Regulation Authority to set out long-term strategies for how they will advance their objectives, including their secondary objectives to facilitate growth and international competitiveness. This will ensure that stakeholders, including regulated firms in the sector, are able to fully understand the UK’s strategy towards the sector. This will also ensure that government and parliament are able to effectively hold the regulators to account for how they translate their objectives into different priorities.

As part of the consultation, the government also confirmed it will review the regulators’ overall reporting structure to focus it on the regulators’ core functions and objectives, minimising the number of documents stakeholders and Parliament must engage with for effective scrutiny.