An influential group of MPs backed the government’s plans to move EU rules on financial services to UK regulators’ rule books.
The Treasury Select Committee said most of what was passed into UK law from EU law during the transition out of the bloc should be turned over to regulators.
When the UK was a member of the EU, much of the country’s financial services regulation was based around Brussels.
After Brexit, this responsibility is now transferred to Westminster. But moving some of the rules into rule books followed by regulators such as the Financial Conduct Authority could avoid cumbersome processes for lawmakers, MPs said.
âKeeping the rules in law could force Parliament to amend or pass new legislation whenever regulators wish to make changes. It would be resource-intensive and impractical, âthe committee said.
âRegulators have a key role to play in the design and development of rules with appropriate parliamentary oversight. “
Regulators should also be given carte blanche to suggest their own policies without first consulting the Treasury, MPs said.
There is currently “significant interaction” between regulators and ministers long before regulators begin to consult on new proposals.
But MPs said they had seen no convincing evidence why ministers should see the full proposals before they are released for consultation. This could undermine regulatory independence, they added.
Committee Chairman Mel Stride said: âAs the UK forges a new post-Brexit future, the government’s approach to financial services regulation will be essential. He must strike the right balance between effective control and ensuring that the regime is nimble and light as much as possible. “
He added: âPreserving the independence of our financial services regulators from political interference is essential to ensure that the UK remains a leading financial center in the world. “
The Treasury said: ‘We are committed to ensuring that the UK remains one of the main financial centers now that we have left the EU, and as part of that, we are making sure that the regulation of the sector works within. the interests of UK businesses, markets and consumers by revising the regulatory framework.
âWe are reviewing all responses to our first consultation before a second consultation in the fall. We welcome the committee’s report and will carefully consider their recommendations.