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.
Cost Benefit Analysis Advice
It should be noted that:
- The CBA Panel’s review is intended as a high-level, independent, expert review of the draft CBA. It does not replicate FCA analysis and does not verify data used in it.
- The CBA Panel is not responsible for the content of FCA CBAs nor for certifying that they meet statutory obligations.
- The CBA Panel's review focuses on evaluating the evidence, analysis and methodology within the CBA rather than the underlying policy itself.