The UK’s Financial Services Authority has begun a consultation concerning how the proposed new Consumer Protection and Markets Authority should pursue consumer protection, including whether certain products should be banned or more closely regulated.
The FSA is to be broken up, with its consumer protection responsibilities being hived off into the new CPMA. On Tuesday, the FSA published a discussion paper examining how it should pursue that objective, and specifically the issue of product intervention.
The paper outlines how the FSA has already shifted towards a more interventionist approach, and it contemplates possible future interventions that could be introduced in areas where the potential for customer harm is greatest under the new regulator. These might include interventions such as banning products or prohibiting the sale of certain products to specific groups of customers, prescribing product features, regulating product fees, boosting proficiency requirements, or requiring sales only with advice, it says.
“The crucial issue is how far along this spectrum of earlier and more intense interventions we should progress. This debate comes at a critical time as the scope and powers of the CPMA are being discussed by the government, parliament and stakeholders. It is fundamental to shaping the regulatory philosophy of the new organisation,” says FSA chairman, Lord Turner, in the foreword to the discussion paper.
“Our analysis has led us to the conclusion that a significant shift in approach is required but there are important tradeoffs to be struck – between consumer protection and consumer choice, between effective regulation to prevent customer detriment and the costs that that will inevitably impose,” he added.
The consultation ends on April 21.
IE
UK regulator considers tougher consumer-protection rules
Interventions could include banning products or prohibiting the sale of certain products to specific groups of customers
- By: James Langton
- January 25, 2011 December 14, 2017
- 10:13