The FCA has a legal obligation under FSMA 2000 to undertake and publish a CBA when consulting on a proposal to make or amend rules, and when final rules differ significantly from the draft rules.
Role of the Cost Benefit Analysis Panel
The Cost Benefit Analysis Panel is a new independent panel of experts established by the Financial Services and Markets Act 2023 to provide advice to the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) in relation to cost-benefit analysis (CBA).
The FCA undertakes a CBA in order to analyse and estimate, where possible, the likely impacts of a policy on different groups such as industry, consumers, markets and the FCA. As well as providing transparency to the public and our stakeholders that we are using our powers appropriately, a CBA helps us to understand whether our proposed interventions are likely to be effective and are proportionate to the harm we are trying to address.
The FCA is currently recruiting the panel which we hope to complete in Q1 2024.