Call for Evidence

Background

The Financial Services and Markets Act 2023 (FSMA 2023) introduced a new secondary objective for the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority (PRA) of facilitating the UK economy’s international competitiveness and its growth in the medium to long term. FSMA 2023 contains the following objective for the FCA and PRA:  

“The competitiveness and growth objective is: facilitating, subject to aligning with relevant international standard—

(a) the international competitiveness of the economy of the United Kingdom (including in particular the financial services sector), and (b) its growth in the medium to long term.”

Purpose of the inquiry

The Financial Services Regulation Committee, chaired by Lord Forsyth of Drumlean, is seeking views on the FCA’s and PRA’s secondary objective of facilitating the UK economy’s growth and international competitiveness, how that is being implemented by the regulators and integrated with their other objectives, and what the implementation of those objectives might mean for the financial services sector in the UK.  

Contributing evidence

The Committee encourages anyone with expertise in or experience of the matters under consideration in its inquiry to submit written evidence. If you wish to contribute to this inquiry, please respond to the questions below. There is no obligation to answer every question.

Questions

The Committee is seeking evidence on the following questions:

1. What opportunities or changes should be prioritised in order for the regulators to meet their secondary growth and competitiveness objectives effectively?
2. To what extent are the regulators focused on the objective to promote international competitiveness and growth? Are there areas where the ability of the regulators to fulfil their secondary objectives might be constrained by having to fulfil their primary objectives?
3. What are some of the barriers in the current regulatory framework (including the role and responsibilities of other regulators and bodies such as the Payment Systems Regulator, The Pensions Regulator and the Financial Ombudsman Service) that could hinder efforts to drive economic growth and international competitiveness in (a) the UK economy and (b) the financial services sector?
4. Do the regulators have the right capability and capacity to fulfil their regulatory objectives on growth and competitiveness? To what extent might the culture of the FCA and PRA influence their ability to fulfil their growth and competitiveness objectives?
5. How effectively have the FCA and PRA consulted or engaged with industry in relation to the new secondary growth and competitiveness objective?
6. In delivering their secondary objective on growth and competitiveness, what opportunities are there for the regulators to help to promote and support innovation in the financial services sector? How effective has the FCA’s regulatory sandbox been for supporting greater innovation in the financial services industry?
7. How should the regulators ensure that any measures introduced to meet the secondary growth and competitiveness objectives work for businesses of all sizes across the sector, including startups, scaleups, and incumbents?
8. Are there any additional metrics over and above those already agreed by the regulators that would better enable stakeholders to track progress and support scrutiny of their work against the secondary growth and competitiveness objective? How should a measure of growth be included in these metrics?
9. Does the requirement within the secondary growth and competitiveness objectives to align with international standards create any constraints to fulfilling those objectives?
10. Are the existing accountability measures around the secondary growth and competitiveness objective adequate?
11. Are there examples of regulatory policies in other jurisdictions that should be considered by UK regulators to help facilitate the new secondary objective? What might the FCA and PRA be able to learn and apply from comparable supervisors in other markets in terms of applying secondary objectives on growth and competitiveness?

This is a public call for written evidence to be submitted to the Committee. The deadline for submissions is 11.59pm on Thursday 11 July 2024.

ANNEX: Guidance for Submissions 

Written submissions should be submitted online, as a Word document. If you have difficulty submitting online, please contact the Committee staff by email at  hlfinservreg@parliament.uk

Short, concise submissions are preferred. Scientific and technical content should be accessible to non-specialist readers. Responses should not be longer than five sides of A4 in size 12 font. There is no requirement to answer all questions in your submission. You may tell us about issues that we have not specifically asked about, but that are relevant to the topic of the inquiry. 

All submissions made through the written submission form will be acknowledged automatically by email. Once you have received acknowledgement that the evidence has been accepted you will receive a further email, and at this point you may publicise or publish your evidence yourself. In doing so you must indicate that it was prepared for the Committee, and you should be aware that your publication or re-publication of your evidence may not be protected by parliamentary privilege. 

Evidence which is accepted by the Committee may be published online at any stage; when it is so published it becomes subject to parliamentary copyright and is protected by parliamentary privilege. The Committee cannot accept any submissions that have not been prepared specifically in response to this call for evidence, or that have been published elsewhere. 

Personal contact details will be removed from evidence before publication, but will be retained by the Committee Office and used for specific purposes relating to the Committee’s work, for instance to seek additional information. 

Persons who submit written evidence, and others, may be invited to give oral evidence. Oral evidence is usually given in public at Westminster and broadcast online; transcripts are produced and published online. Persons invited to give oral evidence will be notified separately of the procedure to be followed and the topics likely to be discussed. 

Substantive communications to the Committee about the inquiry should be addressed through the Clerk of the Committee, whether or not they are intended to constitute formal evidence to the Committee. 

This is a public call for evidence. Please bring it to the attention of other groups and individuals who may not have received a copy directly. 

Diversity comes in many forms and hearing a range of different perspectives means that committees are better informed and can more effectively scrutinise public policy and legislation. Committees can undertake their role most effectively when they hear from a wide range of individuals, sectors or groups in society affected by a particular policy or piece of legislation. We encourage anyone with experience or expertise of an issue under investigation by a select committee to share their views with the committee, with the full knowledge that their views have value and are welcome. If you think someone you know would have an interest in contributing to the inquiry, please pass this on to them. 

You may follow the progress of the inquiry at: https://committees.parliament.uk/work/8433/fca-and-pras-secondary-competitiveness-and-growth-objective/