Financial Conduct Authority chief executive designate Martin Wheatley says the new regulator will work on a “shoot first and ask questions later” basis, ahead of a document next month which will set out the new regulatory approach.
Speaking at an Association of British Insurers conference on conduct regulation in London this morning, Wheatley (pictured) discussed the new powers the FCA will gain under the new regulatory structure, such as publishing warning notices at an earlier stage and the power to intervene in risky products and ban them from being sold. He said the product intervention powers are not expected to be used frequently.
But 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 will set out how the FCA will differ from the FSA, what the new regulator can expect of firms and what firms can expect of the FCA.
Wheatley said the document will set out in detail the FCA regulatory approach to issues such as supervision, policy, authorisations, enforcement, and the regulator’s new powers.
He said: “Next month’s document will tell you how we intend to deliver against our objectives, how we intend to make sure markets work well in the interests of consumers, what we expect from firms, and how business models will be evaluated against the objective of good outcomes against consumers.
“It will also set out how our thinking is evolving in terms of the use of product intervention powers, competition powers, and some of the new aspects of regulation we are being asked to take on under the new bill.”