Accountability of regulators Chair of the Payment Systems Regulator as member of FCA Board
The FCA is the conduct regulator for financial services in the UK. The FCA Board is the governing body of the FCA. The composition of the FCA Board is set out in FSMA 2000 and consists of:
A chair appointed by HM Treasury (the FCA Chair);
A chief executive appointed by HM Treasury;
The Bank’s Deputy Governor for prudential regulation;
Two members jointly appointed by the Secretary of State and HM Treasury;
At least one other member appointed by HM Treasury.
	The PSR is the economic regulator for payment systems in the UK. It is an independent subsidiary of the FCA, and the FCA is responsible for appointing the chair of the PSR Board (the PSR Chair), with the approval of HM Treasury.
	From the establishment of the PSR in 2014 until May 2022, the same individual was appointed to the offices of FCA Chair and PSR Chair. As a result, the PSR Chair was effectively a member of the FCA Board, without being expressly referred to in the legislation as a member of that board.
	Following the resignation of the previous FCA Chair, HM Treasury decoupled the FCA Chair and PSR Chair roles to have them performed by separate individuals.
	Continued effective cooperation between the FCA and the PSR is important given that the PSR’s powers apply to users of payment systems, many of which are firms regulated by the FCA. In addition, the FCA is responsible for the regulation of payment services. The PSR is also subject to a statutory duty to coordinate the exercise of its functions with the FCA. Given these respective roles, duties and the link between the UK payments sector and the wider financial services sector, the government considers it is important that the PSR Chair continues to be represented on the FCA Board, now that the PSR Chair and FCA Chair are held by separate individuals.
	The Act ensures the PSR Chair is included in the FCA Board as an ex-officio member, by providing a statutory basis for the PSR Chair to join the FCA Board.
	In addition, the Act ensures the existing FSMA 2000 provisions which apply to the Bank’s Deputy Governor for prudential regulation will also apply to the PSR Chair. This includes providing for the FCA to pay them expenses and prohibiting them from taking part in Board discussions on the FCA’s exercise of its powers in relation to a particular firm or person.