Proposals are afoot to merge the Financial Services Authority with the Financial Reporting Council.
A paper published today proposes the two ‘quangos’ which are responsible for the regulating the accounting profession (FRC) and the UK listing authority (FSA). The Treasury is looking to reform the financial regulations in the UK.
The paper released by the government said “the merging of the FRC with the UK’s listing authority would have the benefit of bringing the UKLA’s regulation of primary market activity alongside FRC functions relating to company report, auditing and corporate governance,”
The Treasury paper said:
“The Government believes that, within the proposed new regulatory architecture, there is a strong case for a powerful companies regulator established with responsibilities for regulating corporate governance corporate information and its disclosure, and the stewardship of companies by institutional shareholders.”
The current Business secretary, Vincent Cable would be responsible for the new regulator as it would be part of the department for business. He express concerns in regards to the “restricted number of big audit firms” and the freedom of the market.
The document released by the treasury is titled: A New Approach to Financial Regulation. It calls for enormous change to financial regulations. It criticises the current system in saying:
“Perhaps the obvious failing of the UK system, however, is the fact that no single institution has the responsibility, authority or power to monitor the system as a whole, identify potentially destabilising trends and respond to them with concerted action.”
The consulting paper advocated the creation of a Financial Policy Committee (FPC) and be part of the Bank of England to supervise financial stability of the UK. The FPC would have a Prudential Regulatory Authority (PRA) and an Independent Consumer Protection and Market Authority (CPMA).
Source: Accountancy Age