The Treasury select committee says it would be “impractical” for the FSA to review the cost of regulation and has recommended that the PRA and CPMA should conduct a review under the new structure.
The FSA has refused to commit to a timescale for consulting on reforming the Financial Services Compensation Scheme, despite widespread adviser anger over the latest £93m interim levy.
It was expected to publish a consultation paper in November but says it is now waiting for the new regulat- ory structure to be finalised.
In its report on regulatory changes, published last week, the select committee says: “Given the urgency of the Government’s reform programme and the resources and time needed to produce a further full study of the costs of regulation, it will be impractical for the FSA to devote resources to such a review at this stage.
“Once the new architecture has been set up, we recommend that the PRA and the CPMA revisit the whole issue of cost of regulation, in the light of the financial crisis and the changes in regulatory structure.”
Last week, select committee member George Mudie told Money Marketing a review should go ahead and if the FSA does not have the time to do it, it should outsource it to an independent body.
Treasury financial secretary Mark Hoban told the committee last week the current provision under the Financial Services and Markets Act for the National Audit Office to look at whether the FSA is providing value for money is “underused”.
He said he would look at further ways to gauge the value that the new regulators offer to fee-payers.