The Treasury select committee is pushing the Government to scrap the approved persons regime for advisers as well as banks.
In a TSC report into the Co-op Bank bid for Lloyds Banking Group branches, published today, Tyrie says the Co-op failings show the crucial need to extend the new senior managers’ regime for banks to all regulated firms.
Experts have previously warned the move could take years and cost advisers millions in regulatory costs.
The FCA is introducing a new regime with greater individual responsibility for senior bank staff.
It is understood the Treasury has blocked the regulator from extending it to all regulated firms.
The report says the failings of former Co-op chair Paul Flowers in particular highlights the clear need for a new regime.
The report states: “While the approved persons regime will be abolished for the banking industry, it will be retained for many in the remainder of the financial services industry, including insurance and asset management.
“Given its manifest failings, this appears hard to justify. FCA director of supervision Clive Adamson appeared in oral evidence to agree with this view.
“The Government and the regulators should at the earliest opportunity make proposals to extend the coverage of the senior managers and certification regimes to, and remove the application of the approved persons regime from, other parts of the financial services industry.”