CBI: Post-Brexit, UK needs smarter regulation, not more
Written by staff reporter
The UK’s regulatory model must adapt to provide a smarter, more fit for purpose regulatory infrastructure to ensure the future competitiveness of the UK’s financial services industry in a post-Brexit landscape, according to a new CBI report.
The business group recommends a series of changes for regulators to provide certainty and stability. New forms of regulatory dialogue are paramount to safeguarding competition, ensuring SMEs in the sector can compete with larger players.
The CBI’s recommendations include a sector-wide call for evidence on the cumulative impact of regulation and more formalised collaboration between the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). It believes regulators should create new sector engagement initiatives – such as firm open days and sector secondments – to give greater opportunities for them to engage with firms; and recommends a thorough re-assessment of the FCA’s criteria to determine fixed and flexible portfolio classification. The CBi also suggests flexible portfolio firms are given regular opportunities to engage directly with the FCA and to offer feedback.
CBI financial services director, Simon Moore, said a strong financial services sector was the “lifeblood of the wider economy”, and enables the growth and security that business and society rely on.
“Through the revenue and growth opportunities it generates, the sector helps to secure the vital public services we use day in, day out, and acts as a magnet for investment into the UK that helps to underpin our local communities,” he said. “But in order for the sector to support business and to benefit everyone effectively, regulation must be fit for purpose. A cultural change is needed to ensure a more practical approach to regulatory shift, through collaboration and engagement, creating a level playing field between smaller firms – who are disproportionately hit by the regulatory burden – and larger companies competing in the sector.
“Smarter regulation – not less regulation – will provide certainty to financial services firms, allowing them to adapt in a shifting political and economic climate as well as anchoring our competitiveness as a global financial centre.”