Accountability of regulators Regulator engagement with HM Treasury, external stakeholders, and Parliament Engagement with stakeholders Requirement for the regulators to establish CBA panels
In response to the October 2020 FRF Review consultation, several respondents expressed support for enhanced external challenge as a way to improve the quality of the regulators’ CBA. The regulators’ existing panels can be, and are, asked for early, qualitative comment on the policy aims and CBA.
	The Act requires the PRA and the FCA to establish new statutory panels dedicated to supporting the development of the regulators’ CBAs. The PRA’s CBA panel will also be used by the Bank of England (for CCP and CSD supervision) and the FCA’s CBA panel will be used by the PSR. The creation of the CBA Panel seeks to improve the overall quality of rule-making by improving the CBA underpinning it. The government also considers that it can increase stakeholders’ confidence that there is regular, independent input into the regulators’ CBA.
	The CBA panels are intended to support the regulators’ development of CBAs. Each regulator must seek the CBA panel’s input as part of the development of CBA before they publish a CBA as part of a public consultation. The government recognises there may be instances where it is disproportionate for a regulator to consult with the CBA Panel before it publishes a consultation. The regulators will be required to publish a CBA framework, which will specify, amongst other things, when the CBA Panel does not need to be consulted before publication of an individual consultation.
	This measure also seeks to ensure that the CBA panels can periodically review the regulators’ CBA methodology and processes by examining a collection of past CBAs following implementation of rule changes. This seeks to enable the CBA panels to provide recommendations for how the regulators can improve their overall methodology and approach to CBA. Where appropriate, these recommendations may form the basis for updating the regulators’ statement of policy on their approach to CBA.
	It is important that CBA reflects, as accurately as possible, the costs and benefits to firms and consumers of implementing and following regulation. In assessing this, the experience of regulated firms themselves is vital. The Act therefore requires that at least two members of the FCA’s CBA panel and the PRA’s CBA panel must be from firms authorised by the respective regulator. The regulators will be responsible for putting in place appropriate policies to manage conflicts where required.