New objectives and regulatory principles New international competitiveness and growth secondary objectives
The government recognises that the financial services sector is not just an industry in its own right but an engine of growth for the wider economy. As the regulators take on responsibility for setting detailed rules in areas currently covered by retained EU law, the government considers that it is right that the regulators’ objectives reflect the need to support the competitiveness and medium to long-term growth of the UK economy, including the financial services sector.
	The Act introduces a new secondary objective for the FCA and the PRA to provide greater focus on international competitiveness and medium to long-term growth. The government wants to ensure that giving the regulators a legal basis for advancing international competitiveness and medium to long-term growth and does not detract from their existing objectives of: ensuring that UK firms remain safe and sound; that the UK’s markets function well; that there is healthy competition in the interests of consumers, and, that consumers and users of financial services receive an appropriate degree of protection.
	The Act enables the FCA and the PRA to act only in a way which facilitates international competitiveness and growth and in the medium to long-term. The government does not want the PRA and the FCA to act in a way which benefits short-term competitiveness at the cost of long-term growth.
	The government is committed to maintaining high regulatory standards in the UK so the new objectives provide for the regulators to facilitate competitiveness and medium to long-term growth subject to aligning with relevant international standards.
	International standards are set by standard setting bodies, such as the Basel Committee on Banking Supervision. These standards are typically endorsed at a political level through international fora such as the G7 and G20. However, given the need to enable implementation across multiple jurisdictions, in some cases, the standards may not fully take account of the law or market of individual countries. National governments or regulators are then responsible for deciding how best to implement these standards in their jurisdictions.
	Since the UK left the EU, the regulators have been generally responsible for making the judgment on how best to align with relevant standards when making detailed rules that apply to firms. The Financial Services Act 2021 also followed this approach in relation to the UK's implementation of Basel standards for bank regulation and of the UK’s Investment Firms Prudential Regime. This approach is consistent with the overarching approach set out in the two Future Regulatory Framework Review consultations, which delegates the setting of regulatory standards to operationally independent regulators that work within an overall policy framework set by government and Parliament.
	When making judgements on how to implement standards, the regulators will consider how best to advance their statutory objectives. In future, this will include the new secondary competitiveness and growth objectives. The wording in the secondary objectives therefore provides flexibility for the regulators to tailor international standards appropriately to UK markets to facilitate growth and international competitiveness, whilst demonstrating the government’s ongoing commitment for the UK to remain a global leader in promoting high international standards.
	Financial Services regulation is a reserved matter. As such, the new objectives for the PRA and the FCA are designed to advance the competitiveness and medium to long-term growth and of the entire UK economy, including the devolved nations and English regions.
	No changes are made to the statutory objectives of the PSR, which is an economic regulator with specific and differing objectives to the financial services regulators.