Slow and unpredictable decisions by regulators are tarnishing the UK’s competitiveness on the global stage, an industry body has warned.
TheCityUK have issued a report that claims the Financial Conduct Authority (FCA) and Bank of England's Prudential Regulation Authority (PRA) are taking too long to vet finance firms, potentially discouraging investment.
TheCityUK say that complex, opaque and slow authorisations, such as for a new chief executive or a new product, can discourage growth and investment.
They acknowledged that the FCA and the PRA are taking steps to speed up authorisations, but say further action is needed.
Miles Celic, chief executive officer at TheCityUK, 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.
The industry body calls on regulators to become “commercially aware" of the challenges the firms they regulate are facing, publish better performance data on authorisations, enhance communication with firms, adopt a 'digital-first' approach and train authorisation staff better.
Omar Ali, Chair, TheCityUK long-term competitiveness group and EMEIA financial services managing partner, EY, said, “The competitiveness of an international financial centre is driven by a range of factors. The UK’s strengths are broad and deep-rooted, including its openness, agility, approach to innovation, talent pool and high regulatory standards.”
The Bank of England told Reuters it recognised the need to improve the timeliness of approving senior managers in particular and was taking steps in line with many of the recommendations.
"This report supports our decision to invest heavily last year heavily in staff and technology, resulting in our pending caseload falling by 50%, even as our workload and level of scrutiny of firms increases," the FCA said.
"We have already announced that we will publish more metrics about our performance soon and will shortly be testing automated application forms to make applications quicker to assess."