Conservative peer Andrew Tyrie has tabled an amendment to the financial services and markets bill which, if passed, would see the Financial Conduct Authority’s enforcement powers subject to greater oversight and scrutiny.
Tyrie’s amendment would see the regulator’s Regulatory Decisions Committee (RDC) gain statutory independence from the FCA and would lay down in legislation the RDC’s purpose of taking contested enforcement decisions on behalf of the regulator.
Currently, the RDC is a sub-committee of the FCA’s main board.
While it has had an independent legal team since 2005, the FCA provides resources and makes appointments to the committee.
Tyrie, who was chair of the Treasury select committee between 2010 and 2017, has been a longstanding advocate for FCA reform.
Speaking to FTAdviser's sister publication, the Financial Times, Tyrie said this week that the current structure of the RDC has “major weaknesses” and gives credence to the perception that it is not independent.
As part of his amendment to the bill, Tyrie has proposed that the RDC’s chairperson must be nominated by the chancellor of the exchequer and must be confirmed by the Treasury committee.
In addition to this and other changes around RDC member appointments, Tyrie has proposed that all interactions between the FCA and members of the RDC relating to any specific potential enforcement actions must be minuted and disclosed to any person potentially subject to that action.
As a result of reforms made in 2021 in an attempt to speed up FCA decisions, issues that include restricting firms’ activities and launching criminal proceedings are no longer referred to the RDC.
Tyrie told the Financial Times that this change stemmed from a “lack of resources” and represented “the removal of a much valued second pair of eyes on the otherwise enormous administrative authority of the FCA”.
FTAdviser understands that the FCA disagrees with Tyrie's assessment.
A spokesperson told FTAdviser: "The RDC plays an important role in scrutinising the decisions we make. We undertook the reforms in order to speed up our decision making which allows us to protect consumers and markets more quickly than we were able to previously.”
FTAdviser understands that the FCA believes the RDC is sufficiently resourced currently and that the current balance is right as any changes risk slowing down its decision making.
jane.matthews@ft.com
