The uk-eu relationship in financial services

The Committee notes that, as a result of the Future Regulatory 
Framework Review, the Government is considering introducing an 
additional, secondary ‘competitiveness’ objective for the Financial 
186 
Q 55
187 
Q 55
188 
Q 87
189 
Q 72
190 
Q 12
 (Miles Celic)
191 Written evidence from Innovate Finance (
RFS0008
)
192 
Q 106

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THE UK-EU RELATIONSHIP IN FINANCIAL SERVICES
Conduct Authority and the Prudential Regulation Authority. 
However, it is equally important for the UK’s overall economic 
competitiveness for the Government and regulators to work together 
to develop a broader regulatory culture that is responsive, consistent, 
and proportionate.
152. 
We ask the Government, in its response to this report, to explain in 
further detail how a secondary ‘competitiveness’ objective would 
be applied by the regulators in practice and how success will be 
measured.
Scrutiny and accountability of regulators
153. With respect to retained EU law,
193
the FRF sets out proposals to move 
regulatory requirements from statute to the regulators’ rulebooks through a 
programme of secondary legislation. It is anticipated that this will be a time-
consuming process, possibly taking several years.
194
154. Representatives of the regulators told the Committee that the aim of the 
FRF was to make regulation “a more coherent process”. Regarding the 
transposition of powers to the regulators, Sam Woods argued that “the EU 
method of having a lot in legislation was to make sure that all the countries 
in the EU do the same thing”, and that this rationale no longer applied to 
the UK post-Brexit.
195
Sir Jon Cunliffe of the Bank of England added that 
there were advantages to this approach, as “regulators’ rulebooks are more 
flexible” than primary legislation.
196
155. Witnesses from the sector were broadly supportive of the Government’s 
approach to the FRF. Michael Dobson said that Schroders plc “support the 
proposal that much of the detailed regulation should be the responsibility 
of the regulator rather than enshrined in legislation”.
197
Caroline Dawson 
described the benefits of the proposal in further detail, arguing that it would 
be:
“consistent with the UK’s traditional approach to financial services, 
which is having a framework piece of legislation and then delegating 
powers to the regulators, with appropriate safeguards, so that the 
regulators, which have the day-to-day supervisory experience and the 
in-depth knowledge of the financial markets, are the ones writing the 
rules rather than taking up parliamentary time. That makes a lot of 
sense.”
198
156. However, a number of witnesses recognised that such an approach would 
require a system for ensuring that there was “adequate scrutiny and 
accountability” of the regulators,
199