Select committee: Financial Services Regulation Committee

Conclusion 100

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)

However, witnesses were clear that the regulators must balance the need to work quickly to leverage new opportunities with adherence to their primary objectives, recognising that innovation can introduce new risks and consumer harms. Witnesses pointed to cryptocurrency as an example of a highly volatile product which presents a material risk of financial harm to consumers who purchase it. Soups Ranjan, Co-Founder and Chief Executive Officer of Sardine, told us: “One method of regulating crypto could be to think of it as any asset that has a lot of volatility. You could think of regulating it like gambling.” 162 Simon Taylor, Head of Strategy and Content at Sardine, praised the FCA’s work to clarify the consumer-facing rules on cryptoassets, telling us that: “the FCA has done a commendable job clarifying the nature of what a crypto asset is for the benefit of the UK population. There has been good work clarifying the online promotions section of the FCA handbook. There is now a register of crypto asset firms held at the FCA.” 163 Enabling innovation

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