Several industry and professional bodies have published their responses on Treasury’s consultation on a “blueprint for reform”. Amongst the responses:

  • BBA wants to see a thorough reassessment of the role of the Financial Policy Committee. It also feels that where one entity within a group is authorised by the Prudential Regulation Authority (PRA) the whole group should fall under PRA’s auspices. It is concerned the Financial Conduct Authority (FCA) will struggle to achieve the right operational effectiveness for the new regulatory arrangements and particularly that the role of the Markets Division should not be subsumed within the larger retail focus of FCA. It welcomes the moves to ensure consistency between UK regulators and seeks assurance the UK will be fully and properly represented in Europe.
  • IMA says serious work is still needed on the draft Bill. It is particularly concerned that competitiveness should be an explicit aim and that the role and powers of the Financial Services Compensation Scheme need ambitious and thorough revision. Its other major concern is how the proposed powers on product intervention will be used. (See also IMA’s comment on the Call for Evidence on the draft Bill in FReD 9 September).
  • The City of London Law Society (CLLS) Regulatory Law Committee is concerned the proposals are a scant framework for such fundamental reform. Specifically, it is concerned the proposals do not have adequate underpinning of the interaction between regulators, that the PRA has too much discretion over its scope and that the regulation of exchanges should not be split from the regulation of clearing and settlement institutions.
  • The International Capital Market Association (ICMA) is worried some of the proposals may result in “retail style” regulation for some wholesale transactions and, generally, stresses that FCA should be able to apply its toolkit differently for wholesale and retail issues.
  • The Association of Private Client Investment Managers and Stockbrokers (APCIMS) is worried there is no apparent framework that would place an obligation on the relevant regulator to ensure it has effective processes and appropriate support to enable firms to meet their regulatory obligations, for example by proper and clear communication with firms. It is also worried the Treasury’s paper was “UK-centric” and did not discuss the European context adequately.
  • The Building Societies Association (BSA) welcomes many of the proposals, but is concerned over the cost of migration to the new model, the UK’s bargaining position in Europe and the product intervention powers. It is also worried about how the Consumer Credit Act regulatory regime will be dismantled and placed within the FCA’s rulebook.

(Source: BBA Responds on Regulatory Reform, IMA Responds on Regulatory Reform, CLLS Responds on Regulatory Reform, ICMA Responds on Regulatory Reform, APCIMS Responds on Regulatory Reform and BSA Responds on Regulatory Reform)