Regulatory Mandates and Review in the 2022 Financial Services and Markets Bill: Marking Their Own Homework

Abstract

On 20 July 2022, the Chancellor of the Exchequer introduced a new Financial Services and Markets Bill to the House of Commons. This Bill had been much anticipated and was presaged by a prior consultation on the post-Brexit regulatory framework for the UK.

There are a number of notable features of the Bill: this article will concentrate on Chapter 3, which concerns the accountability of regulators. The key provisions for the Prudential Regulatory Authority (PRA) are in ss 27-29. These amend the Financial Services and Markets Act 2000: (i) s 27 imposes a duty on both the PRA and the Financial Conduct Authority (FCA) to review rules; (ii) s 28 gives the Treasury certain powers in relation to rule making; and (iii) s 29 grants the Treasury powers to determine matters which the regulators must include in their considerations when making rules. Together, they represent a significant change to the prudential regulatory process in the UK.

In this article, the author explains the background to these provisions, discusses the current text, considers its likely effect, and explores some potential improvements to it.

Keywords: Financial Regulation, Regulatory Review, Financial Services and Markets Bill, Regulatory Call-back