The UK government has given the go ahead to
the Financial Reporting Council (FRC) to reform its structure,
following the output of a joint consultation.
The reform aims to simplify the regulator’s
structure by consolidating its operating subsidiaries from seven
down to two.
FRC chair Baroness Hogg said the
regulator’s structure was “over-complicated” and the reform will
enable it to mobilise its expertise to strengthen the UK’s voice
UK Business Minister Norman Lamb said by
tightening FRC focus and streamlining its governance and structure,
the regulator would become more effective.
“The FRC will continue this dialogue with
stakeholders as the changes are implemented,” Lamb said.
- Proposed reforms, which are part of a wider
UK regulatory framework, include:
- Delegating most statutory powers to the FRC board not the
- Providing the FRC board with powers to determine and require
recognised supervisory bodies (RSBs) to impose sanctions for poor
- Providing the FRC board with powers to impose directions and
financial penalties on the RSBs and recognised qualifying bodies
for shortcomings in discharging their regulatory responsibilities
in relation to the quality of auditing in the UK; and,
- Enabling the FRC to conclude disciplinary cases without a
public hearing where all involved agree.
The UK regulatory body also made a series of
senior appointments to comply with the part of the reform that does
not need law changes, such as the grouping of activities around
codes and standards, and conduct.
Jim Sutcliffe has been appointed as chairman
of the new Codes and Standards Committee, which will include the
areas covered by the board’s corporate governance committee such as
the Accounting Standards Board, the Auditing Practices Board and
the Board for Actuarial Standards.
Richard Fleck has been appointed chair of the
Conduct Committee, which will encompass the areas covered by the
Financial Reporting Review Panel, the Professional Oversight Board,
the Audit Inspection Unit and the Accounting and Actuarial