Responding to the FCA’s Approach to Regulation paper, director of policy Andrew Strange said the body’s proposed remit includes “significant developments” in product and economic regulation and warned the new regulatory approach could damage the UK’s international standing.

“We must also consider the proposals in the wider context of the European and indeed international agendas,” he said.

“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.”

Although Strange said the FCA’s proposed responsibilities mark a “milestone” in the overhaul of the UK regulatory system, he added AIFA is concerned the new structure could bring additional costs.