Inquiry into FCA and PRA secondary growth and competitiveness objective

• Call for evidence
• Inquiry: FCA and PRA’s secondary competitiveness and growth objective
• Financial Services Regulation Committee

Background 

The Financial Services and Markets Act 2023 (FSMA 2023) introduced a secondary objective for the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). FSMA 2023 contains the following objective for the FCA and PRA:  

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

(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"

The Act requires both the FCA and PRA to, so far as reasonably possible, act in a way which advances the objective. The Government, in the explanatory notes to the Act, states that this objective should not detract from existing objectives and emphasises that it “does not want the PRA and FCA to act in a way which benefits short-term competitiveness at the cost of long-term growth.” 

The Financial Services Regulation Committee was established by FSMA 2023 to scrutinise the work of financial services regulators. The focus of its first inquiry will be to examine how the FCA and PRA are applying themselves to the secondary growth and competitiveness objective, what progress has been made so far and what the implementation of those objectives might mean for the financial services sector in the UK.   

The Committee will explore: 

• To what extent the FCA and PRA are focused on their secondary objective of facilitating the international competitiveness and growth of the UK economy; and the balance between the regulators’ primary and secondary objectives.
• Whether the resources and culture of the FCA and the PRA facilitate the effective implementation of their secondary objective. 
• In delivering their secondary objective on growth and competitiveness what opportunities there are for the regulators to help to promote and support innovation in the financial services sector.  
• Whether the agreed metrics related to the secondary growth and competitiveness objective allow for sufficient scrutiny of any progress made by the regulators.
• How effectively the FCA and the PRA have consulted with industry in relation to their secondary growth and competitiveness objective.
• How the FCA and PRA might draw on examples of regulatory policies in other jurisdictions to further the implementation of their secondary objective. 
• How the regulatory landscape is affecting the UK’s attractiveness to domestic and international investors, and in particular to UK pension funds. 

A full list of questions can be found in the Call for written evidence (see link above). 

Timeline 

The Committee invites written submissions to its inquiry by 11.59pm on Thursday 11 July 2024.

Further information

• About Parliament: Select committees
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