UK:
First Statutory Audit Report Of FCA And PRA Published
11 April 2014
Shearman & Sterling LLP
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On 25 March 2014, the UK's National Audit Office
("NAO") published its first statutory audit report of the
Financial Conduct Authority ("FCA") and the Prudential
Regulation Authority ("PRA"). The report examines the
progress made by the regulators in developing and implementing
their regulatory approaches. The report concludes that the two
regulators cost more than the Financial Services Authority (the
"FSA"). The 24% increase in cost is attributed to the
difference in regulatory approach adopted by the new regulators and
the cost of running two regulators instead of one. The NAO
recommends that the regulators should (i) develop more structured
approaches to evaluation of their work; (ii) establish a body of
evidence from experience of managing conflicts between conduct and
prudential regulation; (iii) review the effect of staff turnover
rates in practice; (iv) evaluate the impact of the new regular data
requests on firms; and (v) clearly define the outcomes sought and
measures of performance. Clarification is also needed over how the
PRA would access the information necessary to assess its economy
and effectiveness.
The NAO report is available at: http://www.nao.org.uk/wp-content/uploads/2015/03/Regulating-financial-services.pdf.
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