WIREDGOV

The Financial Services Authority (FSA) has published the Journey to the FCA a paper that sets out how the UK’s new financial conduct regulator will operate. The Financial Conduct Authority (FCA) will start work next year with a remit to make financial markets work well so consumers get a fair deal.

Speaking at a Thomson Reuters Newsmaker event in London yesterday to mark the launch of the paper, FSA managing director and chief executive officer designate of the FCA, Martin Wheatley said:

“The FCA offers a huge opportunity for the regulator and firms to start afresh, and work in partnership to reset how we deal with conduct in financial services.  We see it as the role of the regulator to not only make the relevant markets work well but also to help firms get back to putting their customers at the heart of how they do business.”

Martin Wheatley outlined the changes in approach that will be taken by the FCA.  The FCA will aim to learn the lessons of previous issues such as PPI mis-selling by taking earlier and more decisive action to deal with problems early.  It will devote more resources to analysing possible risks and looking at cross-industry issues to assess the cause of problems.     

This approach will be backed by new powers that will allow the FCA to ban products and promotions if it believes that they create risks to consumers.  The FCA will also promote effective competition in the interests of consumers.   Speaking about its competition role, Martin Wheatley said:

“In our work here, and in other areas, I am very conscious that we have to work with firms.  Making regulation work better for us is also about allowing firms room to try new ideas and develop their business.

“Promoting competition will play an important part in this.  We are not here to stand in the way of progress that will be of benefit to consumers.  Our goals as the FCA are clear: we will work for an industry that is better at  serving the needs of its customers.”

The FCA will also continue with much of the FSA’s existing work – for example preventing unauthorised firms from trying to rip-off consumers and taking enforcement action for cases of wrongdoing.

The FSA is asking for comments about the plans for the FCA and the consultation period runs until 14 December 2012.

Notes for editors

1. The Journey to the FCA and Martin Wheatley’s speech can be found on the FSA website.
2. The FSA published its FCA Approach Document in June 2011.
3. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.
4. The FSA will be replaced by the Financial Conduct Authority and Prudential Regulation Authority in 2013. The Financial Services Bill currently undergoing parliamentary scrutiny is expected to receive Royal Assent by the end of 2012.