Former CMA chairman calls for FCA reforms

Lord Tyrie, the former chairman of the Competition and Markets Authority and the parliamentary commission on banking standards, will – according to the Financial Times – table an amendment to the financial services and markets- bill designed to ensure “statutory independence” of the Regulatory Decisions Committee (RDC). 

A subcommittee of the FCA’s main board, the RDC takes contested enforcement decisions on behalf of the regulator and operates separately from the rest of the organisation. However, while it’s had an independent legal team since 2005, the FCA makes appointments to the committee and provides its resources – a situation Tyrie describes as having “major weaknesses”, fueling perceptions that the RDC is not independent.  

Changes in 2021 also mean issues including restricting firms’ activities and launching criminal proceedings are no longer referred to the RDC. This shift, according to Tyrie, has been due to a “lack of resources” and represented “the removal of a much valued second pair of eyes”.  

Additionally, he wants the chancellor to directly appoint the RDC’s chair and give the committee “independently established resources”, and is pushing for a paper trial of all interactions between the FCA and the RDC.  

A person familiar with the FCA’s position told the Financial Times that the regulator disagrees with Tyrie’s assessment and believes it has the “balance right” between the separation of powers and efficient decision making.