The Financial Conduct Authority (FCA) has said it would “welcome” the power to recommend changes to what it does and does not regulate, in its response to letters from HM Treasury.
The chief executive of the FCA, Nikhil Rathi (pictured), in a letter to Chancellor Nadhim Zahawi, said such a power would let the regulator ensure its perimeter enables it to protect consumers and markets in a dynamic and ever-changing sector.
However, he pointed out that it would also continue to respect the fact that decisions for changes will be made by the government and parliament.
While saying the regulator supports the government’s ambition for the Future Regulatory Framework (FRF) Review, Rathi also highlighted the importance of retaining the FCA’s operational independence.
He wrote: “We recognise the need to build in more accountability given the regulators’ new responsibilities for making rules in areas that are currently covered by retained EU law.
“We remain committed to exercising our functions in a transparent and accountable way, and we hope our Strategy and Business Plan demonstrate this commitment. However, it is critical that the outcomes of FRF review do not undermine our operational independence.”
The former chair of the FCA, Charles Randell, had previously warned on the dangers of giving the government powers to intervene in its processes, saying it could lead to the loss of independence and agility.
In the rest of his response, Rathi highlighted the work the FCA has done in the past and added that the regulator would continue to take account of the government’s economic policy and recommendations when considering how to exercise its functions.