Clause 28 - Recognition requirements: power of FCA and Bank to make rules

Financial Services Bill – in a Public Bill Committee at 3:30 pm on 8th March 2012.

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Question proposed, That the clause stand part of the Bill.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

I shall be brief. Again, I have a couple of questions. Will the Minister explain what mechanisms will be in place to ensure scrutiny of the rules made by regulators? What accountability will the regulators have to report to the Treasury on the rules on recognition requirements? Again, those questions follow a theme that we have consistently pursued throughout our consideration of the Bill. When rules are made, who has absolute oversight? What is the Treasury’s role? And at what point will the Treasury call for a report or intervene? What power will the Treasury have to rescind rules with which it disagrees? What consultation procedures have been established ahead of any rule changes?

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

All regulators have to go through quite an elaborate process to consult on rule changes, thereby ensuring that people are aware of and may discuss those rules. Clearly, in that public consultation, if any important issues are raised, they will come to the attention of not only the regulators but the Treasury. So I am confident that, in exercising these rules, as with rules under every other clause, the regulator will follow the proper process.

We are setting up independent regulators. The Bank, the FCA and the PRA are independent regulators in this area, and it would breach that independence if the Government interfered in their rules. I hope that reassures the hon. Lady that the right procedures are in place on consultation and that the independence of the regulators is respected.

Photo of Cathy Jamieson Cathy Jamieson Shadow Minister (Treasury)

The Opposition understand what the Bill intends to do to set up the independent regulators, but I emphasise that many of our concerns are about the interaction between those regulators. We want to establish who would have the responsibility of sorting out any disagreement or problems that emerge between the regulators, which is why we have tabled a number of probing amendments and consistently raised that issue during the debates. I have heard what the Minister said, and there is not enough of a problem for us to object to the clause, but we will return to the matter.

Question put and agreed to.

Clause 28 accordingly ordered to stand part of the Bill.