The Financial Services Authority (FSA) has outlined how its successor body charged with conduct and markets regulation will be tougher, bolder and more engaged with consumers.
The document sets out how the Financial Conduct Authority (FCA), which will assume responsibility for protecting consumers and markets’ regulation from the end of 2012, will deliver its objectives.
The FCA will:
Be more outward looking and engaged with consumers and better informed about their concerns and behaviour where this is relevant to regulatory action
Intervene earlier to tackle potential risks to consumer protection and market integrity before they crystallise
Be tougher and bolder, building on and enhancing the FSA’s credible deterrence strategy, using its new powers of intervention and enforcement.
The FCA will seek to improve regulation, restore trust in the industry, and find the right balance between the benefits of early intervention and the consequent risks of reducing choice and raising costs.
Under the government’s plans, the UK’s new model of regulation will see the responsibilities of the FSA split between two new bodies. The Prudential Regulation Authority (PRA), will be a subsidiary of the Bank of England, and will supervise deposit takers, insurers and a small number of significant investment firms. The FCA will be responsible for regulating conduct in retail and wholesale markets, and will operate with the single strategic objective of protecting and enhancing confidence in the UK financial system.
The FCA will intervene where a product may be well known and of utility to consumers but the sales and distribution process of a firm does not meet regulatory standards and consumer detriment is occurring.