Where am I? 
Home Investment
Categories: Investment
Tags:FSA| consumer| David Cameron| George Osborne| treasury| UK government| hm treasury
The Consumer Protection and Markets Authority (CPMA) will follow the same strategy as the Labour-built FSA it is set to replace, the Treasury says today.
David Cameron's cabinet has also confirmed previous announcements the new body will continue with FSA initiatives including the RDR and Mortgage Market Review.
In a consultation paper published today, the Treasury says the new regulator will "adopt" the FSA's Retail Conduct of Business Strategy of consumer protection "involving early detection and intervention through intensive supervision".
It is the same approach announced in March by then-CEO of the FSA, Hector Sants.
Today's consultation proposes the CPMA "will build on the progress recently made by the FSA towards a more interventionist and pre-emptive approach to retail conduct regulation".
"As a starting point, it will adopt the Retail Conduct of Business Strategy."
The Government says it is likely to cost around £50m to create the new regulatory structure in which the CPMA and Prudential Regulation Authority replace the FSA and are brought under the oversight of the Bank of England.
In June, Prime Minister Cameron described Labour's regulatory process as "a system in which no one was looking at the big picture, no one had responsibility and authority to act and no one was effectively in charge".
But justifying its use of policies created under that system, the Treasury paper says these initiatives "recognise and respond to some of the distinctive characteristics of retail financial services that call for a more intrusive approach".
It highlights commission ("long-term product payoffs"), product complexity and "asymmetry of information" between consumers and product providers as areas where a more aggressive strategy is needed.
The approach will be backed by a strong approach to enforcement to ensure "credible" deterrence, it says.
It continues: "The Government will take the creation of the CPMA as an opportunity to examine how consumer protection is enshrined in FSMA and what changes may be needed to update or strengthen the regime.
Combined with a more proactive, interventionist approach to retail conduct regulation by the new regulator, the Government's new framework will ensure consumers are able to operate with greater certainty and confidence in financial services."
Today's paper echoes a speech by Sants in March, when he said: "A regulator must be willing to place themselves between consumers and harm. We will only achieve this by taking a proactive stance."
Described then, Sants "new" strategy involved an integrated model of risk analysis and research, and had the FSA making judgements on firms' decisions and actively intervening in product design.
It also included a greater willingness to test outcomes through mystery shopping and on-site visits, and improvements to the delivery of consumer redress, starting with a review of the complaint-handling standards of all the major banking groups.
| Comment | CPMA to 'adopt' FSA policies; RDR to stay |
Related articles
From IFAonline
Categories
Tags
Comments
CPMA
So, will Keydata Mark II (when it inevitably happens) be an Investment Adviser regulated only by the CPMA , or an Insurance Company prudentially regulated by the PRA , and therefore not in the IFA part of the FSCS?
Posted by: Anon
Same old same old
Same people, same New Labour 'policies', same gaps, same problems, same recipe for catastrophic failure. Same, just the same, no different. Top down regulation doesn't work, but nobody listens.
Posted by: Evan Owen
RDR plods on
So, it is to cost the taxpayer £50m to just change the name and tweek a few rules? Not at all inspiring and I wish I hadn't voted the way I did at the General Election! Cameron said he would scrap the FSA and RDR. Clegg appeared to want to protect the rights of ordinary folk to have independent financvial advice without having to fork out for fees. So far both these political ideals have been scrapped, it seems to me.
Posted by: Derek Vivian
Don't like RDR? Move to Europe
An article I read last week in Money Marketing blew my mind. It basically had an unnamed source at the FSA stating that any financial advisors passporting in from outside the UK would be subject to the regulation they have in their own country. Since we seem to be the only country suicidal enough to go ahead with RDR, these advisors "passporting in" would not be subject to it. What really got me was this source stating, and I quote, “Any European adviser that sets up a firm in the UK will need to meet the RDR requirements but if they passport in they will be regulated by their home regulator. We are not concerned that there will not be a level playing field. Consumers will be free to shop around and choose whichever adviser they want.” Not concerned there will not be a level playing field. *sound of jaw colliding with floor* Oh my goodness. Is this not proof, if any be needed, of the FSA's vandalistic intent. Can I actually escape this madness by registering my business overseas? Here's the link: http://www.moneymarketing.co.uk/regulation/mep-asks-for-euro-probe-on-validity-of-rdr/1015570.article
Posted by: Jon T
Cost cuts urgently required
Excessive regulation and red tape means;- 1. Excessive Costs 2. Stifling Innovation of new products 3. More IFA Practices operating at a loss. 4. Life and Investment Company rationalisation, staff reductions and regional office closures. 5. Deteriorating administration services 4. Advice unaffordeable to 95% of the population due to excessive fee structures. 5. Less advisers- the melt-down is already underway. 6. No mortgage advisers to advise when the upturn eventually arrives. 7. Decreasing sales of existing products etc etc. I there anyone out there who can help?
Posted by: John Hooper
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
Ensure you never miss another story by following IFAonline regularly updated news feed on Twitter.
Events
Poll
|
|
Related Information
Job search
Adviser Careers will open the right investment career path for you. Search hundreds of vacancies on www.advisercareers.com now
In Focus
In the rapidly changing financial climate, we know that the workloads of professional advisers have possibly never been heavier. News is plentiful of IFAs and accountants being asked to review records and justify past decisions to clients. Not to mention, of course, clients questioning future plans for their cash, and wanting to spread their risk around. Wouldn’t it just be great to have a few more hands on board?
Viewpoints
IFA’s, appreciate better than most, there has been a major change in the global markets, both in underlying fundamentals and in peoples’ perceptions and attitudes.
sponsored by
Not very inspiring
We have the FSA admitting they nearly scrapped RDR. The new government breaking up the FSA because it's been a failure in virtually every area they have been involved in, and then they say keep the RDR! How can you keep anything from a discredited organisation is beyond common sense. But when has common sense ever been used?
Posted by: paolo standerwick