The industry body says the FSA does need to develop new rules and regulations or introduce “further radical interventions”, claiming such over-regulation risks stifling the market and restricting consumer choice.
In January, the FSA launched a wide-ranging discussion paper on product intervention where it outlined plans to give the FSA and its successor body powers for greater product intervention to help protect consumers.
In particular, the regulator said it could force advisers to take further qualifications when advising on specific non-mainstream products it fears could lead to poor customer outcomes.
But the ABI today said consumer confidence will only improve if the regulator focuses on more effective, proactive and consistent supervision and enforcement of existing rules which underpin the treating customers fairly principle.
“We want to see a balanced risk-based regulator which oversees a market which delivers positive outcomes that meet consumer needs and expectations,” said ABI director general Otto Thoresen (pictured).
“This will only be achieved by maintaining a healthy level of consumer choice and market competition. Meeting this objective requires the government and the regulator to recognise the inter-connectivity of a series of initiatives that form part of an overall package of reforms at both the UK and EU level.
“Any major change should not occur in isolation, but has to fit with the whole suite of existing and planned regulatory developments.”
He added the body does not consider the FSA’s discussion paper “well placed” within the context of wider regulatory reform.
“We urge the FSA and the government to ensure that the forthcoming ‘vision document’ for the FCA takes a holistic view that is focused on delivering good consumer outcomes.”
