It is good to have more clarity but:

  1. It doesn’t matter what co-ordination measures they put in place eg. MOUs, the Bank of England and the FSA never got on.  If this remains the case with the PRA and the FCS, any co-ordination measure put in place will not work.  they need to be able to talk to one another.
  2. It is difficult to see any reason why firms should have enforcement warning notices published .  This will be before action has been taken and a decision has been made.  It will cause damage to the firms in question from the date the warning notice has been issued and even if later a notice is issued that enforcement action has been terminated, the reputational damage will already have been done. 
  3. It is appropriate that a member of FCA represents ESMA but not necessarily that PRA solely represents EBA and EIOPS.  Conduct issues are important in respect of EBA and EIOPS as well.  Whilst there will be co-ordination etc. measures put in place so that the PRA and FCS consult with one another, it will appear on the International circuit that EBA and EIOPS are not represented in the UK on conduct issues. In addition, it is unlikely that the PRA, even with FCS views on conduct issues, will be as enthusiastic in defending the UK on these issues as with prudential issues.  
  4. Dual regulated firms will be subject to longer authorisation processes (PRA needing to give approval for prudential and approved persons which could affect prudential issues eg. significant influence functions like the CEO).  They will also be subject to two lots of levies, supervision, threat of enforcement etc.      
  5. The name change to the FCS is a good one but why is the PRA name not changing?  The PRA is only responsible for the prudential regulation of significant influence firms, not all firms and the name is confusing as a result of this.  Perhaps it should be called the Significant Influence Firms Prudential Regulatory Authority or Financial Stability Prudential Regulatory Authority.

The Treasury’s detailed plans for breaking up the Financial Services Authority and dividing responsibility among three new regulators have been published.