The UK financial watchdog the Financial Conduct Authority (FCA) has today launched a consultation with the financial services industry, relating to what areas of regulation it should be focusing on in the future.
The UK regulator said in a statement earlier today that its new ‘Mission’ consultation, is designed to provide a guiding set of principles around the strategic choices the FCA makes. It will inform the FCA’s strategy and day-to-day work over the coming years.
The FCA has been under fire across the last 12 months for a variety of reasons from how it handled recent UK banking failings, to how it regulates both onshore and offshore investments.
As a result the regulator’s new chief executive Andrew Bailey, who was appointed earlier this year, is keen to make his own mark and improve the perception of the FCA both by the UK public and the financial industry alike.
‘Focus our resources’
“Establishing and embedding a clear mission for the FCA is critical to our success, both as a regulator and to UK financial services as a whole,” said Bailey. Our Mission will set out a framework within which we prioritise our work, ensuring we focus our resources in the right places.
“This will improve accountability and transparency of how and why we make the choices that we do,” he said.
Bailey added that the ‘Mission’ will only be a success if stakeholders engage through the “very open” consultation process.
“We hope that we can set out a clear path ahead for financial conduct regulation in the UK,” he concluded.
‘Large and complex remit’
The FCA statement said that it is “has a large and complex remit, and finite resources with which to fulfil”. It said that it has clear objectives set by UK Parliament, principally to ensure that relevant markets function well.
The intention of the Mission is to provide clarity over the objectives, the methods to allow it to focus its efforts in the right places as well as explaining the reasoning behind the work the FCA does and a framework on how it chooses the tools it uses to do it.
Key themes that the FCA will be consulting on include:
- Protecting consumers – in an environment where consumers are increasingly expected to take responsibility for their own financial decisions, what is the right level of consumer protection; and how does the FCA balance the responsibilities of firms and consumers?
- Vulnerable consumers – should the FCA prioritise the protection of vulnerable consumers and if so how?
- Delivering consumer redress – what should the role of the FCA be in redress schemes, for example in dealing with activity outside the FCA’s remit?
- When the FCA intervenes – how the FCA identifies harm and how it decides which approach to take to address it; and how can the FCA be clearer for firms, consumers and stakeholders on what it is doing and why?
- The scope of regulation – explaining the remit the FCA has for taking action and the circumstances in which the FCA may intervene with regard to unregulated activities;
- The interaction between regulation and public policy – explaining this interaction using examples including access to financial services and price discrimination;
- Competition, supervision and enforcement – providing clarity and seeking feedback on the FCA’s current approach to using its different regulatory powers and tools;
- FCA Handbook – seeking suggestions on a proposed review of the FCA Handbook which sets out the rules for firms.
Commenting on the FCA’s Mission consultation, Association of British Insurers (ABI) director of regulation, Hugh Savill said: “The Mission Review is a clear commitment to assessing the way the FCA works as a conduct regulator. We are pleased that being clearer on expectations, process, and analysis is a priority. This will benefit consumers and industry. Andrew Bailey is rightly setting the tone from the top, and we look forward to engaging with the Review.”