The UK government is planning changes to "take back control" of UK financial services regulation after Brexit.
Currently, the government and Treasury consider and legislate regulations which the EU, FCA and Prudential Regulation Authority (PRA) propose.
But in a new consultation paper, the Treasury has proposed changes to the Financial Services and Markets Act (FSMA) which would mean the government would set ‘core elements of the regulatory approach' as well as the ‘specific purpose of the regime'.
Now we’ve left the EU, we can take back control of our financial services regulation and ensure it works for the UK"
"Now we've left the EU, we can take back control of our financial services regulation and ensure it works for the UK," a Treasury spokesperson told Financial News.
"Much of our regulatory approach to financial services has been prescribed by EU legislation. Leaving the EU means the UK has the opportunity to take back control of the decisions governing our financial services sector," the Treasury said.
"Government and parliament will be responsible for setting the policy framework for financial services regulation. This will include new policy framework legislation for specific areas of regulated activity which will give the government and parliament the opportunity to set out the key public policy issues that must be considered when designing and implementing regulatory standards," the consultation paper added.
Representatives from some of London's largest banks and asset managers including Citigroup, and BlackRock have spoken with Treasury officials about the future of UK financial services regulation after Brexit in recent weeks. These have been part of industry-wide discussions on other matters, according to people with knowledge of them, FN reported.
These changes to how regulatory policy is made, the Treasury said, are being considered because the government wants greater control over the FCA and PRA post-Brexit and it wants the regulators to be ‘more accountable' for the regulations they introduce and implement.