A new report from TheCityUK has found that financial regulatory authorisations at the FCA and the PRA can be slow and inefficient.
The report – titled ‘Improving regulatory efficiency on authorisations’ – details that whilst regulators continue to be a UK strength, where firms perceive their authorisations processes as too complex, opaque, or slow, it can discourage further growth and investment.
While recognising and welcoming that both the FCA and PRA are already taking forward measures to improve their authorisations processes and reduce backlogs, the report sets out a series of recommendations for further action that, if delivered in conjunction with those measures already in train, would improve their speed, efficiency and effectiveness.
TheCityUK’s research involved interviews with over 20 industry leaders and a survey of 40 firms about their experience of four specific areas of the UK regulation authorisation – processes, variation of permission, change in control and approval of senior managers.
The report finds that the majority of respondents (83%) found that the inefficiencies of these authorisations are slowly damaging the international competitiveness of the UK.
TheCityUK CEO Miles Celic said, “The UK is one of the world’s leading international financial centres, but our competitors are biting at our heels. Complacency is not an option. The Financial Services and Markets Bill and measures set out in the Edinburgh reforms provide a strong platform from which the UK can continue to strengthen our position.
“However, the culture and operational efficiency of regulators are critical factors in maintaining the UK’s competitive edge. Successfully updating the rules also depends on the referee implementing them in the same spirit and with the same energy.
“While the UK’s regulatory framework and high standards underpin our attractiveness as a place to invest and grow, it is clear that an efficiency gear shift in regulatory culture would help to strengthen that position. More efficient, transparent, and timely authorisations processes are an important part of that and would help enhance the country’s competitive advantage.”
TheCityUK’s recommendations to the regulators include adopting a more commercially aware, efficiency-focused mindset by following through on ambitions set by regulators’ senior leaders to be more commercially aware in firm-facing operations.
Also, the report calls on regulators to develop a better understanding of the impact of the authorisations process on firms as well as to embrace transparency, accountability, and external engagement by publishing better performance data on authorisations, offering more comprehensive guidance to firms on the authorisations process and enhancing engagement and communications with firms.
Recent research by Dealroom found that London has climbed ahead of San Francisco and New York to become the world’s biggest center for FinTech investment.
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