Introducing an international competitiveness objective for the regulators
The creation of the ‘Twin Peaks’ regulation model saw the deletion of article 2(3)(e) from the Financial Services and Markets Act 2000 which had imposed a duty on the then regulator to have regard to:
‘the international character of financial services and markets and the desirability of maintaining the competitive position of the United Kingdom’
The decision not to apply this obligation to the FCA and Prudential Regulation Authority (PRA) has, in BIBA’s opinion, created a regulatory environment that relieves the regulators of any obligation to consider the cumulative effect of the rules that they impose.
In December 2019 the Queen’s speech referenced that the main benefits of incoming legislation would be ‘Enhancing the competitiveness of the UK’s financial services sector, while maintaining high standards to protect UK consumers so that they can use financial services products with confidence’. The importance of a competitiveness objective cannot be overstated at a time when the UK will be looking to compete internationally following the UK’s withdrawal from the EU. When the EEA market is ‘closed off’ to the thousands of small regulated entities that do not have the capital to set up a business in those territories, a knock-on loss of business could ensue.
CALL FOR ACTION
For Government to introduce an international competitiveness objective to the FCA, PRA and CMA.
“As a leading international broker we need support from Government on the world stage, especially considering Brexit. Introducing an international competitiveness objective to UK regulators would be a welcome step.”
Managing Director, Willis Towers Watson
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