Prudential Regulation Authority

Memoranda of Understanding Between FSCS, PRA and FCA Published

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On June 26, the FSA published a draft memorandum of understanding (“MoU”) between the Financial Services Compensation Scheme (“FSCS”) and the new Prudential Regulation Authority (“PRA”) and a second MoU between the FSCS and the new Financial Conduct Authority (“FCA”). MoU between FSCS and PRA. MoU between FSCS and FCA.

In particular the MoUs cover:

  • The roles of the FSCS, PRA and FCA;
  • Information sharing between the FSCS and the new regulators and confidentiality issues;
  • Policy making;
  • Funding the FSCS;
  • Co-ordination between the PRA and FCA on the oversight of the FSCS; and
  • Reporting obligations on the FSCS to the new regulators.

Treasury Committee Publishes Report on the Financial Services Bill

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On 8 June, the Treasury Select Committee published a report setting out its main concerns on the Financial Services Bill. Report.

In particular, it called for amendments to the Bill which would:

  • Oblige the Court of the Bank of England to undertake retrospective reviews of the Bank of England’s performance;
  • Give a general power to the Chancellor of the Exchequer to direct the bank of England when public funds are at risk;
  • Make competition an objective of the Prudential Regulation Authority;
  • Ensure Parliament, through the Treasury Committee, may request retrospective reviews of the work of the Financial Conduct Authority’s (“FCA”).

It also considered whether the Treasury Committee should have a role in the appointment and dismissal of the Governor of the Bank of England and whether there is a way of requiring the FCA to publish board minutes. It welcomed the House of Lords to re-examine these issues. The second reading of the Bill in the House of Lords will take place on 11 June 2012.