On 11 March 2020, HM Treasury published its response to the first phase of the Government’s review into the financial services future regulatory framework. The first phase of the review considered the specific issue of coordination between UK regulatory bodies with responsibility for financial services regulation, with the aim of improving the effectiveness of coordination in the future. The Government is of the view that the institutional architecture for UK financial services regulation remains appropriate.
In its response HM Treasury also states that it will be launching in the summer a Regulatory Initiatives Grid (Grid) that will provide an indicative two-year forward look of major upcoming regulatory initiatives affecting the financial services sector. The Grid will include all publicly announced supervisory or policy initiatives that will, or may, have a significant operational impact on firms. The Grid will be published twice a year and will set out an indicative timetable for each regulatory initiative.
The Grid will be managed by a coordinating Forum: the Financial Services Regulatory Initiatives Forum (‘the Forum’) with a membership comprising the Bank of England, PRA, FCA, Payment Systems Regulator, Competition and Markets Authority, and HM Treasury (as an observer member), as the main contributors to the Grid. Other bodies (such as the Information Commissioner’s Office, the Pensions Regulator) and Financial Reporting Council will be invited to attend and contribute to the Grid on an ad hoc basis, if and when responsible for a major initiative affecting the sector.
The Government will use the next phase of the review to develop a more coherent approach to financial services regulation in the UK. The aim is to adapt the regulatory framework so that it provides for a clearer split of regulatory responsibilities. The review will explore how the UK’s regulators can take the lead on designing and implementing the specific requirements that apply to firms, while ensuring there is appropriate democratic policy input. The review will therefore consider what the role of Ministers and Parliament should be in deciding how important public policy issues are to be addressed in key areas of financial services sectoral regulation.