Question to the HM Treasury:

To ask the Chancellor of the Exchequer, if she will take steps to increase the accountability of the Financial Conduct Authority with the finance industry.

The Financial Conduct Authority (FCA) is fully accountable to Parliament and the Government for how it discharges its statutory functions. Legislation places a range of statutory requirements on the FCA designed to support accountability and enhance transparency.

For example, the FCA is held to account through regular appearances at Parliamentary committees, including the Treasury Select Committee and the Lords Financial Services Regulation Committee.

Ministers regularly engage with the FCA to ensure it continues to improve its operational efficiency.

In addition, the FCA regularly engages with industry, consumers and other stakeholders via consultations, publications and statutory panels.

The statutory framework also includes a requirement for the FCA to establish a Complaints Scheme, which allows anyone directly affected by the way in which the FCA has exercised, or failed to exercise, its functions (other than its legislative functions) under the Financial Services and Markets Act 2000 to make a complaint. The Complaints Scheme is overseen by the Financial Regulators Complaints Commissioner, who is an independent person appointed by HM Treasury and has powers to recommend the payment of compensation and to require the FCA to publish its response to any recommendations. The FCA’s decisions can also be challenged in the courts under judicial review procedures. There is an appeals process for supervisory and disciplinary decisions made by the FCA.

The Government will continue to hold the FCA to account for its performance against its statutory duties, its work to reduce administrative costs, and alignment with government priorities.

The government has recently consulted on proposals to require the FCA and the Prudential Regulation Authority (PRA) to publish long-term strategies setting out how they will advance their objectives, including their secondary objective to facilitate growth and international competitiveness. This would ensure that stakeholders, including regulated firms in the sector, are able to fully understand the FCA and PRA’s strategy towards the sector. The government is currently considering the responses to that consultation and will set out next steps in due course.