The FCA is set to be given a new objective by the government to “promote effective competition in the interests of consumers” from next year.
In a wide-ranging speech at an Association of British Insurers event today, Martin Wheatley, the CEO-designate of the FCA, said the regulator was in the process of thinking through what its role would be, but said it would concentrate on four outcomes:
- firms competing for business by offering better services, better value and the types of products their clients want and need
- no firms sustaining excess profits
- firms innovating and developing new products, or providing services in different ways
- a market where the successful firms are the ones that respond most effectively to consumers’ genuine needs
Wheatley said: “Whatever the causes of poor competition, they are often complex, and arise from a combination of problems rather than one area.”
He also cited the Retail Distribution Review (RDR) as one way of eliminating competitive advantages, by banning commission.
“As the implementation date of 31 December is fast-approaching, firms’ response to and readiness for the RDR is a big focus for us and we will ensure that ongoing policy interests are achieved,” Wheatley said.
“We want to make sure that firms do not just implement the detailed requirements of the RDR, but take into account its spirit and the central aims it is designed to achieve.”
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Although the final remit of the FCA is still being debated in the House of Lords, the FSA will later this month publish an approach document setting out its powers and how it will achieve its objectives.
In today’s speech, Wheatley once again explained how the FCA will have the power to make product intervention rules, which could go as far as banning products without consultation.
He said: “This is something that has worried a few in the industry, but I don’t believe this should be a concern for any responsible firm.
“It will make us a more effective regulator – and there are times in the FSA’s past when having this up our sleeve would have got better and faster results.”
