The FSA introduced its TCF guidelines in July 2005, signaling a move towards a more principles-based approach to regulation.
But in feedback to its discussion paper on product intervention it published today, it says it wants to create one set of rules for firms, which will incorporate TCF and the FSA’s Principles for Business guidelines.
The FSA also says it remains of the view that a product intervention approach is an essential means of achieving an appropriate level of consumer protection.
The FSA, says: “We believe that it is necessary for us to make changes to our regulatory approach to consider the entire product life cycle, including product governance and distribution standards.
“We are already supervising firms’ product governance under our new intensive approach. In addition, we will take forward a single set of rules and guidance on product governance, including, for example, turning some or all of the TCF material into rules, and will consider additional interventions going forward.”
In January this year it published a discussion paper that explained its proposed new approach to the regulation of retail financial services.
In its feedback, it says: “We agree that the point-of-sale is a critical part of the value chain and is a key determining factor in whether consumer detriment will arise.
“However, we consider that product design and decisions made by product designers about how – and to whom – products will be distributed play a significant role in determining consumer outcomes.
“Our starting point is not a desire to dictate product structures to the market, rather to put right problems where competition and the regulatory approach have been ineffective in delivering on genuine customer needs.”
It says it is looking primarily at the product governance processes employed by firms, whether competition is working effectively for consumers, and whether firms are exploiting consumer behaviour.