FCA consults on long-term strategy to avert future financial crises
The Financial Conduct Authority (FCA) has launched a consultation on its mission to provide a core set of principles about future strategy and day-to-day work in a bid to strengthen its effectiveness as the financial regulator
26 Oct 2016
The aim of the FCA mission is to provide clarity over the regulator’s objectives, improve the current regulatory controls and the wider organisational framework. It is now three years since the FCA was set up to replace the Financial Services Authority (FSA) in the wake of the financial crisis.
The need to strengthen the regulatory environment and ensure that previous scandals are not repeated is one of the key drivers behind the decision to re-evaluate the FCA’s mission statement.
FCA chief executive Andrew Bailey said: ‘Four of the more prominent headings for this conduct crisis are retail products, most notably Payment Protection Insurance; wholesale market products, most notably LIBOR and the FX market scandals; the sale of products to corporates, such as interest rate hedging products; and areas of financial crime, involving money laundering and the breach of financial sanctions.
‘This is a very sorry history, and the future needs to be radically different from the past. We owe this to the public who are the consumers of financial services.’
The FCA is consulting on the following issues:
- 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;
- 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?
- FCA Handbook – seeking suggestions on a proposed review of the FCA Handbook, which sets out the rules for firms.
Bailey added: ‘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.
'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.’
The FRC is actively seeking the views and feedback of interested parties through a comprehensive engagement and communications plan. This programme will include briefings, regional visits, speaking platforms, discussion forums, digital communications and one-to-one engagement.
The closing date for comment is 26 January 2016. Email responses to FCAMission@fca.org.uk
The consultation document, FCA - Our future mission, is available here