What is a requirement for the FCA to ensure accountability?

The requirement for the Financial Conduct Authority (FCA) to report to Her Majesty's Treasury (HMT) annually is rooted in the structure of accountability and oversight established by the UK's regulatory framework. This reporting obligation aligns with the FCA's role within the financial system, as it provides HMT with insights into its activities, performance, and regulatory objectives. This annual report is crucial for maintaining transparency and provides an opportunity for HMT to assess how effectively the FCA is fulfilling its statutory objectives and duties.

By reporting to HMT, the FCA ensures that there is a dialogue between itself and the government, which is essential for accountability to the public and to the national interests in regulating financial markets. This process allows HMT to hold the FCA accountable for its performance and for the impact of its regulatory decisions on consumers and the financial system as a whole.

In contrast, the other options, such as annual public reporting and conducting quarterly reviews, do not specifically address the requirement for direct accountability to HMT. While engaging with the public and various stakeholders is important for transparency, the primary accountability mechanism mandated involves reporting to the Treasury. Yearly budget planning, while a critical aspect of financial management, does not in itself ensure accountability relative to performance oversight.