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Treasury reveals remit of Financial Conduct Authority
by Iain Martin on Feb 17, 2011 at 13:40
The Financial Conduct Authority (FCA) will be charged with protecting confidence in the UK financial system but will need to consider the impact of regulation on market efficiency and consumer choice, the Treasury has announced.
The Treasury has announced the four objectives of the FCA, which will be one of the replacements for the Financial Services Authority when it is disbanded, in its consultation into the shake-up of financial services regulation in the UK. They are:
- facilitating efficiency and choice in the market for financial services
- securing an appropriate degree of protection for consumers;
- protecting and enhancing the integrity of the UK financial system
- The FCA must, so far as is compatible with its strategic and operational objectives, discharge its general functions in a way which promotes competition.
The FCA will also be bound by the principle that consumers of financial services are ultimately responsible for their own decisions. ‘The degree and type of regulatory protection afforded to them should be tailored to their needs and expertise. The FCA will take these differences into account in determining what sort of regulatory action to take in each sector, on a case-by-case basis,’ stated the Treasury, which emphasised the role of the Consumer Financial Education Body in empowering to take decision confidently.
The Treasury also decided against charging the FCA with promoting financial inclusion and widening consumers access to advice and financial services, but concluded this was social rather than regulatory policy.
The FCA will be compelled to make a report to the Treasury in the event of a regulatory failure under new legislation proposed in the consultation paper.
The Treasury added FCA would have a ‘lower risk appetite’ for product problems but will not pursue a zero-failure regime. It said the FCA would be more willing to order the use of consumer redress schemes and past business reviews to secure better outcomes for consumers.
New proposed powers for the Financial Conduct Authority include:
- 12-month product bans
- Cancelling contracts that breach its product rules
- Publishing more information on firms under investigation
- Banning misleading financial adverts
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FSCS loses appeal against landmark High Court payout ruling
by Michelle Abrego on Jun 18, 2013 at 18:29
11 comments so far. Why not have your say?
Jonathan Kirby1
Feb 17, 2011 at 12:58
So its first task must surely be to get rid of RDR which fundamentally attacks three of those four objectives?
report thisNigel Herrick
Feb 17, 2011 at 13:09
Is this actually saying a return to Caveat Emptor ? or have i woken up in Never Never Land .....??
report thisl'ifa passeport en provenance de France
Feb 17, 2011 at 13:18
Wow ! No need to passport in then
Jonathan , It was the treasury that stopped RDR , stopped through the back door eh?
report thisMichael Brown
Feb 17, 2011 at 13:21
Sureley items 2 & 3 are RDR so this is 2 out of 4?
report thisAlasdair Sampson
Feb 17, 2011 at 13:25
Oh dear Nigel!
I suggest that you have woken up in never never land.
The FSA issued a paper on precisley that - consumer responsibility for their own decisions and caveat emptor featured there. Sadly, however, all of that was rendered so conditional as to be effectively meaningless. I have referrd to and founded upon it in defending complaints to the FOS who paid not a blind bit of notice.
Having let the genie - that the consumer need not now think for himself - out the bottle you cannot put it back.
Exit the FSA and entrance the CPMA AND the FCA.
I can almost guarantee that these two organisations - which will be staffed by refugees from the FSA - will end up issuing conlficting statements, guidance and rules.
Welcome to your Brave New World, guys.
report thisJonathan Kirby1
Feb 17, 2011 at 13:29
Michael,
it depends what you feel they mean by integrity.
Something that is being destroyed can hardly be stated to have integrity?
Hence my 3 out of 4.
Keep smiling
report thisIan Jenkins
Feb 17, 2011 at 16:07
Its great I have now worked for
1. LAUTRO
2. PIA
3. SIB
4. FSA
and now FCA and thats since 1994? So it would say to me that before long it will be another TLA ( three letter abreviation).
Maybe we could fruity things up use more relevent abreviations
CRAP Confused Regulator And Public
MUD More Unnecessary Due-dillegence
FSUK Financial Shake-UP Knocking
Anyway back to the real world of trying to help clients
report thisJonathan Kirby1
Feb 17, 2011 at 16:29
Ian,
I can add FIMBRA & IBRC to that list.
Seems to me that the IFA channel is about the only constant is a sea of change.
report thisAdam Smith
Feb 17, 2011 at 16:53
Messrs Jenkins & Kirby - I think you mean you've been REGUKLATED BY rather than WORKED FOR. But hey, that's just detail; doesn't matter in our industry, does it?
report thisAdam Smith
Feb 17, 2011 at 16:53
And I just hate it when a typo creeps into a comment like that!
report thisRon Jones
Feb 17, 2011 at 19:06
we just have to wait and see, maybe the MPs and treasury will drop RDR in the present form and maybe the new regulator will be better.
It wont do anyone any good pulling them apart before they even get in to office.
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