FSA to start issuing product warnings in hardline approach
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The Financial Services Authority is to start issuing product warnings as part of its hardline approach to product intervention and says it will not wait for Europe to push ahead with tougher product regulation plans.
Mortgage Strategy’s sister publication Money Marketing reports that the FSA interim managing director of the conduct business unit Margaret Cole has told Reuters she expects the regulator to start issuing warnings soon on products where there is significant risk of consumer detriment.
Cole says: “I expect us to start being more clear, being more direct both to firms planning products and to consumers about the dangers of products, such as structured products we have concerns about.”
She says the regulator has already been toughening up its approach to products.
She says: “We have been asking for minutes of product approval meetings and there are examples where we have told a firm to go back and add features to a product to bring about greater comfort on our part.”
The European Union is set to issue draft laws to bring more products under retail rules, typically tougher than those in place for wholesale markets.
But Cole says: “We do not need to wait for new legislation or regulation to be moving in that direction.”
In January the regulator published its product intervention discussion paper, which floated a range of measures to strengthen the regulation of financial products including product bans, price caps, and limiting sales volumes.
The Treasury also put out a consultation paper in February which set out new powers for the restructured regulator, the Financial Conduct Authority, to ban products for up to one year to prevent consumer detriment.
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