The Sub-Committee on Financial Services Regulations will scrutinise proposals and have the power to summon witnesses, order the production of documents and agree reports, the Treasury Committee said.
In its second report this session, Future parliamentary scrutiny of financial services regulations, it said that “at the very least” proposals that contain legal ramifications from the Financial Conduct Authority, the Prudential Regulation Authority and the Bank of England, should be assessed against their likely impact on providers and consumers.
An examination of justification for policies adopting a “lift and shift” approach will be required, as will their suitability, it said.
Balance between service providers, consumers and other stakeholders should also be taken into account, as should any drawbacks to proposals.
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“Following the UK’s exit from the EU, our regulators have assumed significant new responsibilities. Those will require scrutiny, and Parliament has an opportunity to put in place a process which is less bureaucratic and significantly more nimble than was previously the case in the European Union,” said chair of the Treasury Committee Mel Stride.
“The Treasury Committee is well placed to conduct this scrutiny. We often consider new regulatory proposals and, given our responsibility to scrutinise the Treasury and its associated regulators, we can take a holistic view of regulatory change,” he added.
The sub-committee is to intervene at consultation paper stage, where proposals have been drafted but require influence.
A new Financial Services Scrutiny Unit is also being formed, which will include financial specialists, Treasury Committee staff and a legal adviser from the Office of Speaker’s Counsel.
Specialist advisers will also be appointed and it will advise the sub-committee on the likely impact, readiness of and level of appropriate scrutiny for each proposal.
The sub-committee will begin work on the PRA’s ‘Strong and Simple Framework’ which the Treasury Committee said could significantly impact how banks manage risk.