Question to the HM Treasury:

To ask His Majesty's Government what assessment they have made of the capacity and resources available to the Prudential Regulation Authority and the Financial Policy Committee to carry out the additional responsibilities transferred to them under the Smarter Regulatory Framework.

As of the most recent update in July 2025, HM Treasury has repealed, amended, or replaced 51% of assimilated law it is responsible for, as set out in the Retained EU law and Assimilated Law Dashboard. The great majority of this is financial services legislation.

In the last 12 months, HM Treasury has made SIs to replace the EU’s Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation, and the EU’s Short Selling Regulation.

Sustainable economic growth is a priority of the government. That is why the Financial Services Growth and Competitiveness Strategy, published on 15 July 2025, sets out the government’s approach to delivering a regulatory environment for financial services that is proportionate, predictable, and internationally competitive.

The government has sought to deliver this approach in a way that minimises disruption and produces the most streamlined and accessible framework for firms and creates an agile, workable and coherent regime. For example, through the Financial Services and Markets Act 2000 (Designated Activities) (Supervision and Enforcement) Regulations 2025, which make it easier for the FCA to consistently supervise activities and enforce rules that replace key parts of EU law.

The financial services regulators already have significant rule-making powers, and the government worked closely with them in determining its approach to replacing retained EU law, to ensure that regulators are ready to take on additional responsibilities. It is for regulators like the Prudential Regulation Authority, the Financial Policy Committee, as well as the Financial Conduct Authority, to determine their approach to these new responsibilities They are funded via a levy on financial services firms, and it is their responsibility to set their own funding requirements each year, following consultation, to ensure that they are able to carry out their functions.