The Treasury select committee’s inquiry into the Financial Conduct Authority will focus on its objectives, powers, accountability and how it interacts with domestic and European financial regulators.
The draft Financial Services Bill, currently being scrutinised by a separate Parliamentary committee, proposes breaking up the FSA and replacing it with the FCA, the Prudential Regulation Authority and the Financial Policy Committee. The FCA will regulate markets, the PRA deposit takers and insurance firms while the FPC will work to ensure financial stability.
Today, the TSC published its terms of reference for the inquiry which include whether the objectives and powers of the FCA clear and appropriate, whether it should have a primary duty to promote competition and if its approach to regulation be an improvement on the FSA’s.
The committee will also look at the accountability of the FCA, how it will interact with firms, the other domestic and European regulators and how the switch from the current tripartite system to the proposed twin peaks system will work in practice.