Regulators in Britain are considering a variety of ways to improve both their own transparency, and disclosure by the firms they regulate.
The Financial Services Authority (FSA) published a discussion paper Monday focused on transparency, and proposes several possible areas where it could increase disclosure, in order to both improve regulatory accountability, and to help consumers make more informed decisions when dealing with the industry. If adopted, the proposals would be put into action by the new Financial Conduct Authority (FCA), which is due to replace the FSA later this year.
The paper suggests that the FCA could enhance the transparency of its work by publishing more information about whistleblowing, such as giving more detail to whistleblowers about the action that has been taken on their tips, and publishing aggregate data about the number of whistleblowing incidents and any action taken; expanding the amount of information that is published about enforcement, such as reporting on the average length and cost of investigations; and, publishing aggregated information about supervisory activity, including the number of planned and unplanned supervisory visits that have taken place across different sectors.
The FCA could also release information about firms, individuals and markets in more detail, or earlier, to highlight particular regulatory concerns. It suggests that this could include: aggregated information about registration, including reasons why applications are refused or withdrawn; disclosing more details about redress schemes; publishing the amount of redress paid by firms; and, improving the content and clarity of information published about areas of regulatory focus.
Finally, the paper notes that the FCA could require firms to publish more information in certain areas. In particular, it’s considering requiring them to provide more detail on complaints data to improve consuer understanding of what the data shows; having firms publish claims data on insurance products to help consumers understand the value of particular products; and, improving transparency in the annuity market to make it easier for consumers to compare products and get the best deal.
“Transparency cannot be an end in itself. We want to make sure that disclosure helps customers make the right decisions when purchasing products and helps the market function more efficiently. We are open to hearing from all interested parties about their views on this paper and their ideas about how the FCA and firms could be more transparent,” said Martin Wheatley, CEO designate of the FCA.
“This is not a one-off exercise,” he added. “As the FCA develops, we will continue to identify additional ways to increase transparency and will be open to feedback from our stakeholders about how this can be achieved.”
The FSA says that the discussion paper’s ideas have been produced in consultation with trade bodies, consumer groups and the independent (consumer and industry) panels. Comments are due April 26.