Bank of England could launch “concierge service” for foreign investment

The Bank of England is open to exploring the development of a “concierge service” for new inbound foreign firms looking to invest in the UK, in a bid to simplify and rationalise the UK regulatory regime. 

The letter says such a service would be similar to the approach the Monetary Authority of Singapore takes in this area, which the PRA has examined closely. The regulator could work up a proposal this year, but would need to liaise with the FCA, the Office for Investment and potentially other stakeholders in thinking about how to approach this.

Another option on the table is work to rationalise the UK financial services regulators’ “have regards”. The number of principles that the PRA is required to “have regard” to has substantially increased in recent years, increasing the complexity of the analysis required when making or amending regulation. Depending on how they are counted, the PRA says it currently has around 25 such “have regards”.

The letter notes: “Under the current framework we pay close attention to these ‘have regards’ and expect to be held to account for them when exercising our powers. However, there is scope to rationalise some of these ‘have regards’ where they form a cluster, for instance in the set of ‘have regards’ which relate to climate and the environment.

“By rationalising, we think there is an opportunity to simplify the length and complexity of the analysis underpinning future regulations, with consequential benefits for the cost of regulatory engagement by firms and the efficient use of resources by the PRA.” 

In addition, the PRA says it could look for potential overlaps between the PRA’s governance and disclosure requirements and those of legislation or other relevant regulators, stating that as it reviews regulatory requirements on bank reporting, “we will also be alert to any potential overlap between our requirements of banks and insurers and those of legislation or other regulators.  With this in mind, we could explore with government colleagues and other relevant regulators whether there are any ways in which we might join up further or reduce overlap across new financial sector reporting requirements”.   

These options are not particularly well developed at the moment, but Wood signalled they could support the regulator’s primary objectives which “speak mainly to stability, which is the basis for a predictable economic environment that allows households and businesses to be confident in planning ahead and making investment and hiring decisions.”

Elsewhere in the letter, the PRA cited adjustments to Basel 3.1 banking capital requirements; the new Solvency UK prudential regime for insurers; removing the “bonus cap” for banks; and working with the FCA and Treasury to review the Senior Managers and Certification Regime as examples of work already undertaken to reduce regulator burdens.