The scrapping of the approved persons regime, (APR), will be considered by the government's Fair and Effective Markets Review, it has been announced
The announcement comes following the publication of the government's response to the report into Project Verde, looking into failings at the Co-op bank.
The APR was formerly used across all financial services for scrutinising senior appointments.
Andrew Tyrie MP, chairman of the Treasury Committee and former chairman of the Parliamentary Commission on Banking Standards, said: "The Approved Persons Regime, the old regulatory regime for approving senior appointments, was a fundamentally flawed, box-ticking exercise.
"Following the recommendations of the Parliamentary Commission on Banking Standards, the Government agreed that it should be scrapped and replaced by a new Senior Managers Regime for banks - targeted on a much smaller number of senior individuals.
"The Treasury Committee concluded in its Report into Project Verde that the APR should also be scrapped for the rest of the financial sector.
"The Government has now announced that the Fair and Effective Markets Review will consider this crucial recommendation as part of its work.
"This is very welcome. It is unacceptable that the APR - which provides the illusion of regulatory oversight but the reality of none - should be allowed to continue in financial services."
