The Government has voted down a proposal that calls for a review of the way UK and European regulators work together during the first 12 months of the new regulatory structure.
In a public bill committee meeting last week, a Labour amendment to the Financial Services Bill that would have mandated a Bank of England review was defeated by 10 votes to eight.
In December, the joint committee on the draft Financial Services Bill raised concerns that UK and European regulators may have difficulty working together because of the differences in the two systems.
The UK will have a prudential and a market regulator in the shape of the Prudential Regulation Authority and the Financial Conduct Authority.
The European supervisory authorities are split along sectoral line, with the European Banking Authority, the European Insurance and Occupational Pensions Authority and the European Securities and Markets Authority. The FCA will represent the UK at Esma meetings while the PRA will be the UK’s voice at EBA and Eiopa meetings.
In January, the Government said it would establish a committee to coordinate the UK’s interaction with the ESAs.
Labour Shadow Treasury financial secretary Chris Leslie told the public bill committee the “spaghetti of regulators” looks like “a recipe for chaos”.
Treasury financial secretary Mark Hoban said the co-ordination committee will undertake ongoing reviews. He said: “It is best the committee we are establishing works on effective co-ordination.”
FCA to have regard to the “ease with which consumers can have access to financial services and products which are affordable and appropriate to their needs”.
Regulated financial services firms to exercise a “fiduciary duty” to customers instead of an “appropriate level of care”.
A review of the co-ordination between UK and EU regulators within 12 months of the Financial Services Bill becoming law.
FCA to “discharge its general functions in a way which promotes the growth and development of social finance and social investment”.
FCA to have regard to raising standards of professionalism.
FCA board to have a duty to publish the minutes from its board meetings.