Regulating after Brexit - Inquiry launched by House of Commons European Scrutiny Committee - 13 June 2022
The House of Commons European Scrutiny Committee has launched a ‘Regulating after Brexit’ inquiry looking at the opportunities for, and the challenges of, policy and law-making following the UK’s withdrawal from the EU. In particular, it will examine the “complexities of making changes to regulations in areas that have been controlled at EU-level in the context of overlapping commitments in the Withdrawal Agreement, new trade deals and the devolution settlements”.
The Committee asks interested parties to submit written evidence in response to a range of questions as set out on the Committee’s website, before 22 July 2022.
Inquiry: Regulating after Brexit
The future of UK financial services regulation - House of Commons Treasury Committee publishes report - 16 June 2022
The House of Commons Treasury Committee (the Committee) has published its first report of session 2022-23 on the future of UK financial services regulation. In the report, the Treasury Committee sets out its recommendations for the future overall direction of travel and regulatory objectives and priorities, reaffirms its commitment to regulatory independence, and comments on specific areas of regulation, including Solvency II and payments innovation.
The Committee notes that “while there are real opportunities to improve competitiveness through regulatory reform, competitiveness should not become a primary objective of financial regulators,” it warns against any “inappropriate weakening of the UK’s strong regulatory standards.” It wants to see the regulators take the importance of growing the economy into account and recommends that the FCA and the PRA should each be given a secondary objective to promote long-term economic growth. This objective should “reflect the ways in which financial services facilitate economic growth by providing capital, credit and insurance to firms outside of the financial services sector.” It also recommends that the FCA should have regard to financial inclusion in its rule-making and should consider how to improve its engagement with the poorest consumers, and seek data on the issues vulnerable consumers experience directly.
The Committee urges the PRA to consider what more can be done to level the playing field between smaller banks and insurers, and larger firms which model their own capital requirements.
Commenting on the Solvency II review, the Committee suggests that the Treasury and the PRA should aim to secure a robust insurance regulatory regime, tailored to the UK market, which adequately captures risk and incentivises investment in infrastructure and business. Innovation, including in the payments space, is identified as one of the areas of investigation for the FCA with a view to providing larger firms with opportunities to develop and conduct experiments. The Committee will be conducting further work on managing challenges associated with payments innovation, including customer protection, preventing crime and financial stability.
House of Commons (Treasury Committee) First Report of Session 2022-23: Future of Financial Services Regulation
Summary of the Report
Conclusions and Recommendations
See also the General section above for an item on the outcome of a June 2022 meeting of the UK-Japan Financial Regulatory Forum.