Select committee: Financial Services Regulation Committee

Conclusion 84

2nd Report - Growing pains: clarity and culture change required - An examination of the secondary international competitiveness and growth objective Published 13 Jun 2025

Financial Services Regulation Committee FCA and PRA’s secondary competitiveness and growth objective All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗

Conclusion (the committee's words)

We heard that the FCA’s approach to measuring its compliance with these targets does not always reflect the true time taken to complete the authorisation process. Witnesses told us that the regulators exclude from their metrics intervals when the regulator or authorised firm is responding to further clarifications or information requests. Caroline Wagstaff told us that “once the clock starts ticking, every time you are asked a question, the clock stops and does not start again until the answer is back.” 140 She added that: “The lived experience is not the 90 days … That could be 90 days stretched over a whole year.” 141 The British Insurance Brokers’ Association told us that, although the FCA’s first secondary objective report claimed that over 98 per cent of authorisation cases were being assessed within statutory deadlines in the final quarter of 2023/2024, 142 the “experience for some firms is that the FCA is falling short.” 143

From: Financial Services Regulation Committee, 2nd Report - Growing pains: clarity and culture change required - An examination of the secondary international competitiveness and growth objective, 13 June 2025

Government response

The government responded to the whole report on 3 September 2025 (deadline 3 September 2025).

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government says there is "strong alignment" between the Committee's recommendations and its July 2025 Financial Services Growth and Competitiveness Strategy, agreeing with many recommendations while declining some, including a new compliance cost study and a review of the secondary objective metrics.

On compliance costs (Recommendation 1), the government agrees burdens should be proportionate but "does not intend to commission a new study" "at this time", to avoid duplicating its baselining exercise; it will consider next steps once that work is complete.
On secondary objective metrics (Recommendation 11), the government "does not plan to undertake a further review at this time", citing the granularity of the existing metrics, but says it will continue to monitor the regulators' progress.
On regulatory overlap (Recommendation 2), the government will "consult on the detail" of consolidating the PSR within the FCA and legislate "as soon as possible", but says it would not be "practical or proportionate" to review all financial services legislation and regulator rules in detail.
On reporting to the Committee (Recommendation 15), the government says it cannot "commit to producing specific research" but will provide an update on its work to the Committee within twelve months.

Read the government's response ↗ Report an error