HM Treasury has published a consultation paper in relation to Phase II of its Financial Services Future Regulatory Framework Review.
HMT is seeking views on proposals for the financial services regulatory framework post-Brexit. It is considering adapting the current FSMA framework by:
- Providing for a clear division of responsibilities between government, Parliament and the regulators. The regulators will be largely responsible for setting the requirements that apply to financial services firms and markets, which means that the majority of retained EU provisions will be transferred to regulators’ rulebooks;
- Setting out in legislation the overall purpose and regulatory approach needed for particular areas of regulated activity. When consulting on changes to rules, the regulators will be required to explain how their proposals meet the statutory purpose set for a particular regulatory regime and have taken into consideration activity-specific regulatory principles.
HMT is also reviewing the accountability, scrutiny and public engagement arrangements that currently apply to financial services regulation. In particular, it is examining the role played by Parliament, the relationship between the regulators and government and potential improvements to engagement by stakeholders in the policy-making process.
The consultation closes on 19 January 2021.