The Financial Conduct Authority will have to report to the Treasury to justify its decisions in the event of a regulatory failure.
The accountability measure was laid out in the FCA’s app-roach to regulation document this week, which includes a duty for the Treasury to publish the report and lay it before Parliament unless there are “good reasons” not to or it could prejudice ongoing investigations.
It says: “The report would address the FCA’s actions and decision-making and consider what lessons can be learned by firms and regulators.
It is only where a significant failure is due to the FCA’s actions that a report will be required.”
The FCA will have to submit an annual report to Parliament evaluating how it has met its statutory objectives which include promoting efficiency and choice in markets and boosting competition. It will be subject to independent investigations on how efficiently it operates and be overseen by a board with members appointed by the Treasury and the Department for Business, Innovation and Skills.