The incoming head of the UK Financial Conduct Authority said that the new regulatory regime replacing the Financial Services Authority will be forward-looking and actively seek out potential issues and deal with them, rather than letting them snowball and allowing problems to build up. In recent remarks, Martin Wheatley said that the FCA will look closely at the financial products being designed and provided and, in extreme cases, use new regulatory powers to ban products first, before consulting. More broadly, he emphasized that the Financial Conduct Authority will ensure that focus and commitment towards the end consumer is taken seriously by all the financial firms it regulates, large or small.
For the first time, he noted, the
two distinct financial regulators: the FCA, which will aim to make sure
consumers get a fair deal from all financial firms; and the Prudential
Regulation Authority, which will ensure that banks and insurers are financially
sound. Mr. Wheatley is currently the Managing Director of
the Financial Services Authority and CEO-designate of the Financial Conduct
Authority, The FSA will be replaced by the Financial Conduct Authority
and the Prudential Regulation Authority in 2013 UK
The Director said that financial regulators must move on from the view that transparency at the point of sale was all that was needed, and that the regulator did not need to question business models. In his view, this approach has proven insufficient time and again in getting good outcomes for people. There are many reasons for this, he noted, such as consumers being asked to take more important financial decisions for themselves but finding financial services confusing, and firms being under intense pressure to bring in profits in a competitive environment and challenging economic times.
He emphasized that the FCA will expect senior management and board of directors to understand all of their business and the risks. This will be especially true if the firm is thinking of new areas to go into to grow the bottom line. It is important to manage conduct risks in financial firms, particularly in respect of new business.
He pledged that the FCA will treat everyone the same, big or small. The FCA will expect all financial firms to give consumers a fair deal. While the FCA we will recognize the differences in the complexity of firms and their business models, the new authority will hold all firms to the same high standards. The FCA will expect the senior management and boards of all firms, whatever their size or structure, to help the authority meet its goal of making markets work and getting a fair deal for consumers.