FCA chief says competitiveness should not compromise consumer protection
It is not the Financial Conduct Authority’s (FCA’s) job to create barriers to entry to support the short-term revenues of incumbents, according to chief executive Nikhil Rathi.
Speaking at the annual City Banquet at Mansion House, Rathi highlighted a Supreme Court case where an insurer argued that the regulator was undermining the competitiveness of the industry by litigating to secure clarity for policyholders.
In response, the City watchdog had argued that if insurers do not meet their legal obligations to customers, the industry cannot be a sustainably competitive one.
“As we embed competitiveness further in our approach, it is vital that we do not compromise on consumer protection, market integrity and competition,” said Rathi.
“Indeed often arguments are put to us on the grounds of competitiveness that are anything but.”
He pointed out that its independence and ability to act quickly are not undermined by “any proposed call-in power”, while speaking out against making its secondary mandate for growth a priority.
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Post-Brexit rules
Rathi said that while the regulator has already completed work to promote growth in a post-Brexit world, it can and will do more.
The FCA will be working with the government and industry to prioritise and sequence 40 or so EU filed due to return to the UK statute book.
It will further work to ensure the UK has a regulatory system that is joined up to avoid duplication.
“We have heard strong, consistent views that this should be done at a steady, manageable pace, minimising transition costs. We agree,” he added. “Throughout we will be committed to transparent impact assessments and cost benefit analysis.”
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Cost of living challenges
Rathi also highlighted the work the regulator is doing with lenders to make sure they are treating customers properly.
The FCA has made eight times more interventions year-to-date against “problematic financial promotions”, compared with last year. It remains vigilant to those who are preying on consumers’ vulnerabilities and is intervening at its fastest pace ever, Rathi said.
“Through our new strategy we also have finalised our Consumer Duty – which puts the onus on firms to put good outcomes at the heart of their products and services,” he said.
“Upfront effort from firms should mean fewer rules down the line. We know the timetables are demanding and we will aim to be pragmatic in our oversight of implementation.”
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