The Prudential Regulation Authority and the Financial Conduct Authority are being investigated by the National Audit Office over whether their regulation is proportionate and whether they provide value for money.
The new so-called “twin peaks” regulatory structure was introduced by the Financial Services Act 2012 and requires an annual NAO review of the regulators.
However, this separate investigation has been requested by the NAO’s comptroller and auditor general.
The resulting report is expected in 2014 and is likely to trigger Parliamentary hearings by the powerful public accounts committee.
An NAO spokeswoman says: “This study will examine the regulatory framework and approach, providing an early assessment on whether regulation in likely to be delivered in a targeted, proportionate, consistent and transparent way, and whether the bodies are effectively working together.
“It will also consider the impact of the changes, both in terms of the additional costs of the regulators and, where possible, through estimates of the additional costs and benefits to regulated firms and consumers.”
During the legislative process which replaced the FSA with the PRA and the FCA, MPs and peers raised concerns about the potential for increased regulatory costs and double charging.
The regulators co-ordinate through cross membership of boards and committees and through memoranda of understanding. MPs have raised concerns that these processes would be inadequate.