The FSA has today published a document, “Journey to the Financial Conduct Authority“, setting out how the UK’s new financial services conduct and markets regulator will operate when it comes in being in 2013. An accompanying speech from Martin Wheatley, CEO-designate of the FCA, is here. Excerpts from the speech:
“The FCA has been set up to work with firms to ensure they put consumers at the heart of their business.
Underlining this are three outcomes:
1.Consumers get financial services and products that meet their needs from firms they can trust.
2.Firms compete effectively with the interests of their customers and the integrity of the market at the heart of how they run their business.
3.Markets and financial systems are sound, stable and resilient with transparent pricing information.
Reforming regulation is not just good for consumers, it will also be good for firms. The industry’s standing has suffered as the mis-selling scandals and other problems have taken their toll. This has damaged the reputation of firms across the industry, whether directly involved or not. We need to work with you to put that right.
While much of what we will do is new, we will also build on what has worked well under the FSA.
We will keep up our policy of credible deterrence, pursuing enforcement cases to punish wrongdoing.
And our markets regulation will continue to promote integrity and carry on the FSA’s fight against insider dealing, which has secured 20 criminal convictions since 2009.
We will continue to keep unauthorised firms from trying to take advantage of consumers.
We will set high expectations for those firms that want to enter financial services, while still allowing innovation and good ideas to flourish.
And we will take forward a strong interest in the fair treatment of customers – an agenda that has been around for many years, but is still key to the FCA.
Fewer firms will have regular direct contact with supervisors, as we shift resources to allow us to deal more quickly and effectively with emerging issues, and run more cross-industry projects to get to the root cause of problems.
We will have new partners to work with and our relationship with the new Prudential Regulation Authority will be crucial, and driven by a culture of cooperation. We will aim to bring our expertise to international debates, so that EU and international policymaking works for UK consumers and firms.
All of this will be delivered by a new culture in the FCA. We will encourage our staff to be more confident in making bold, firm and predictable decisions.
To help us do our job, the Government intends to give the FCA new tools to ensure that consumers get products that meet their needs.
This builds on one of the key lessons from past problems, which is that regulation is often more effective if it steps in early to pre-empt and prevent widespread harm.
We will reflect this in our supervision work when we look at how firms design and sell their products. But a key new power will mean that we can step in and ban the sale of products that pose unacceptable risks to consumers for up to 12 months, without consulting first. We will also be able to ban misleading advertising.
We will use these new tools in a measured way – and while we will act sooner, and more decisively, our approach will be based on a proper understanding of the issues and a full consideration of the potential solutions.
So whilst there may be times when we have to act rapidly, this is not something that firms should be afraid of. Firms selling the right products, in the right way, to the right consumers have little to fear.”
See also: How the FCA will tackle financial crime