The Financial Services Authority has been working hard to inform firms how the Financial Conduct Authority intends to exercise its powers when it comes into force next year. A series of Roadshows and Seminars have been rolled out with the intention of informing all regulated firms who their new regulator will be. If you are not yet sure who will regulate you in the new regime than broadly speaking, all deposit takers (banks, building societies and credit unions), insurers and friendly societies, as well as large investment firms will be regulated by both the FCA and the Prudential Regulation Authority. All other firms will be regulated by the FCA only. Martin Wheatley, who is to head the FCA, spoke at the association of British insurers conference this week in advance of the publication of a further ‘approach’ document set to be released next month. This document is said to provide clarity as to how the FCA plan to exercise their statutory powers against regulated firms. Hinting, in advance of its release, at what that approach is likely to be he said: “The key difference between the future and now, and forgive me for being scary in my use of analogy, is we are being given the power to shoot first and ask questions later. Today’s approach is we find a problem and do lots of analysis, then we publish a set of draft rules and do a cost benefit analysis, we consult with the industry and you tell us we have got it wrong, and we publish another set of rules. A year later we get to the point where we think we got it right first time. We have got to reverse that process. “The presumption is we will step in to make temporary banning orders, where products or certain features are removed, or removed from particular parts of the market, and then we will do the consultation and cost benefit analysis.” The FSA will publish an “FCA approach” document next month which should provide clarity as to how this tough rhetoric will be put into practice.
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