We must, however, take a proportionate view as to how the rulebook is reformed because, while it is tempting to ditch much of the existing EU regulation, there are at least some aspects that do work well. We need to look at regulatory change as an opportunity, but we also need to accept there are elements of the handbook that are there for a reason.
Mifid II, for example, was adopted relatively recently at great financial cost to our members. There will probably be aspects of Mifid that should remain, so we need to beware of throwing the baby out with the bathwater.
While we would encourage an element of streamlining and want to see further efficiencies, we also need to have a clear understanding of what works well already.
An in-depth cost/benefit analysis also needs to take place as regulatory change, even if it is beneficial, always costs money. Our firms have recently adapted to the SMCR and latterly are in the process of adopting the FCA’s new consumer duty, so the benefits of more change in the midst of a challenging economic environment need to be established.
Finally, while we accept that it is not the government’s intention, there remains a risk that prudential and conduct standards are relaxed too far in the pursuit of growth.
So the use of a scalpel rather than a sledgehammer is to be recommended, and future consultations will need to be evidence led with robust cost/benefit analyses to ensure that this risk is minimised
Liz Field is chief executive at Pimfa
