Speaking at today’s FCA Approach to Regulation Conference, Blair emphasised the need for a proactive regulator which will put consumers at the heart of its regulatory philosophy. It needs to have the appetite and ability to use its new powers.
The Consumer Panel believes that the FCA will have to be confident and transparent in the way it works, clear about its regulatory purpose and its expectations of firms. Above all, it must be committed to delivering good consumer outcomes.
Kay Blair, Vice of the Consumer Panel, commented:
“Over the last few years the FSA has undergone a sea-change in behaviour. However, if we are to see the new more effective regulation the Panel has advocated, a quantum leap is now needed.
"It will be critical for the success of the FCA that it moves quickly and decisively to signal a fresh approach to regulation.
"The Panel wants a proactive FCA to address the root causes of misconduct rather than the symptoms of consumer detriment. We want to get rid of the ‘waterbed’ effect, where when the regulator tackles one source of sector-wide misselling, another new problem all too conveniently rises up to replace it.
"This suggests that the causes are systemic, built in to business models, rather than random events. By addressing suspect business models and potentially toxic products, a more effective regulator will nip problems such as any future PPI in the bud well before consumer detriment escalates and certainly before consumers have lost millions of pounds.”
"The FCA needs to encourage and recruit staff who are passionate about – and dedicated to - the delivery of enhanced consumer protection.
"We want to see the new CEO Martin Wheatley drive an ambitious programme of change building on the success of Hector Sants and Margaret Cole in recent years.”
Andrew Strange, AIFA's Director of Policy, comments:
"Today's FCA conference and publication of the proposed approach represents a mile-stone in the revision of the UK regulatory system. AIFA welcomes the opportunity to continue to engage in the formation of our new regulatory system, through the FCA consultation and the pre-legislative scrutiny and HMT White Paper on the draft amendments to FSMA.
"The proposals are wide-ranging and there are many consequences for both firms and consumers. As always, seeking to address those which are unintended or detrimental is AIFA's priority. It is important to view the proposals both in terms of the revisions to FSMA, and the approach of the FCA which includes significant developments in product and economic regulation.
"AIFA also remains concerned about the potential additional costs of such a regulatory structure and approach.
"We must also consider the proposals in the wider context of the European and indeed international agendas. We must consider if there is a risk that in setting down this road it may make the UK too difficult a territory to do business in, which fundamentally could be detrimental to UK consumers."
