The Chancellor this week set out his vision for “an agile and dynamic approach to regulation that supports the growth of the UK economy” in proposals for a new financial regulators’ framework.

While the UK was a member of the EU, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority's (PRA), part of the Bank of England, ability to determine the most appropriate regulatory requirements for UK markets was constrained by strict requirements to apply EU rules.

The proposals set out today will facilitate the repealing of the majority of retained EU financial services law that is no longer appropriate for the UK, and give the UK regulators the powers to replace the law with their own rules, resulting in an adaptable and dynamic UK regime supporting the UK’s commitment to high standards of regulation in the future.

The plans would require the FCA and the PRA to consider both the implications for growth and international competitiveness of their regulations, as well as  their existing objectives of maintaining market integrity, consumer protection and a sound financial system.

Parliament and HM Treasury will receive strengthened scrutiny and oversight over the FCA and PRA, appropriate to the increased rulemaking powers received by the regulators.

This comprehensive review of financial service regulation forms part of the governments wider agenda to review the laws which govern our nation and ensure that they are tailored to support the best interests of UK businesses and citizens, as set out in the Taskforce on Innovation, Growth and Regulatory Reform report.

Chancellor of the Exchequer, Rishi Sunak said:

“Earlier in the year, I set out my vision for an open, green, and technologically advanced financial services sector that is globally competitive and acts in the interests of communities and citizens across the UK, creating jobs, supporting businesses and powering growth across the UK.

“One important part of that vision is ensuring, as an independent nation, that we have a coherent, agile and internationally-respected approach to financial services regulation that is right for the UK.

“Today’s proposals will support the future strength of the UK as a global financial centre, ensuring an agile and dynamic approach to regulation that supports the growth of the UK economy, without diverging from our continued commitment to high international standards.”

The consultation will close on 09 February 2022, after which the government will consider the responses.