The All-Party Parliamentary Group (APPG) for Financial Markets and Services has today published a report which sets out the need for Parliament to have a greater role in defining the regulatory framework for financial services following the UK’s departure from the EU.
The return of rule-making competencies to the UK presents an opportunity to ensure that these powers are designed to allow our financial services sector to continue to thrive, whilst reflecting and supporting the needs of the economy more widely. This is particularly important in financial services, which has an impact on a range of public policy areas such as economic growth, competitiveness and climate change.
The APPG’s paper, which followed a wide consultation with stakeholders across the financial services industry, focuses on Parliament’s role in shaping the political parameters for financial services regulation. The report recognises that further powers for regulators will be necessary, as they are best placed to take on functions previously held at EU level, but that this increase in powers will require a more robust system of checks and balances.
To enable Parliament to effectively scrutinise regulators, the report sets out the case for the creation of a new Joint Committee of Parliamentarians from both Houses with a specific remit for financial services, to allow for more detailed and sustained oversight of regulators. This would be separate to the Treasury Committee, whose remit is too wide-ranging for it to commit the necessary time and resources. The new Joint Committee would be supported by an expert advisory network to deliver the highest standards of scrutiny.
The APPG’s report will be submitted to HM Treasury as part of its consultation on the Future Regulatory Framework Review.
Bim Afolami MP, Chair of the APPG for Financial Markets and Services said:
“Our financial services sector has a remarkable opportunity to improve its already world-class regulatory framework following the UK’s departure from the EU.
“Now regulatory powers have been returned from Brussels, we must make sure the rules that govern the sector are best suited to our own domestic objectives through an effective accountability mechanism, alongside necessary checks and balances.
“This report looks at the appropriate role Parliament should play within this new regime in guiding regulators and setting the political framework for financial services regulation.
“Getting this right will help set the UK up for another decade of global leadership in financial services – attracting international investment and talent, creating jobs and boosting our whole economy in the process.”
Notes to Editors
The full report can be read here.