The FCA has published a speech given by its chief executive, Martin Wheatley. The speech is entitled Making innovation work for firms and consumers.
The central theme of Mr Wheatley’s speech is the evolution of the relationship between the regulator and industry.
When discussing rebuilding trust and confidence in the industry, Mr Wheatley covers two issues:
- the importance of the regulator being receptive to industry concerns and insights. Here, Mr Wheatley mentions that the see-saw nature of the relationship between industry and regulators over the years – increasing oversight in crisis, diminishing oversight during boom – is unhealthy. Instead the focus should be on continuous improvement with consideration being given to areas where domestic legislation can be developed, or even reduced, without creating destabilising crises; and
- the value of firms taking their own responsibility to move things forward. The FCA will continue to engage with firms but it is already now fast tracking thinking on a few of the key concerns that business has already raised. Mr Wheatley mentions three specific strands: advice, disclosure and market innovation. On advice, he mentions that next month the FCA will be publishing a Consultation Paper around some of the “big ticket” advice related challenges. On top of this, the FCA will produce guidance offering greater clarity to firms around the broad expectations for supplying limited or simplified advice. On disclosure, Mr Wheatley feels that evolution is a more likely scenario than revolution. To support the more organic approach the FCA has agreed to grant waivers to product disclosures that do not follow FCA guidance to the letter. In addition, the FCA is reviewing guidance and rules to check that they are genuinely supporting customers to understand financial products, including the ‘with-profits disclosure document’. In the latter part of this year, the FCA will be pulling this work into a single paper, alongside a consultation on potential Handbook changes. In relation to market innovation, Mr Wheatley states that the priority areas here might include mobile banking, online investment and money transfer.
View Making innovation work for firms and consumers, 29 May 2014