Watchdog’s approach may ‘stifle market and curb consumer choice’
The ABI has warned the FSA to steer clear of new rules and regulations on new products that could stifle the market and restrict consumer choice.
In its response to the financial services watchdog’s discussion paper on how it should intervene in the product development process, the ABI has called for a balanced approach.
The ABI says the regulator should focus on more effective and consistent supervision and enforcement of existing rules, which it says will address developing market failures and boost consumer confidence in the financial services industry.
Amongst the interventions the FSA discussion paper proposes are banning products or prohibiting their sale to certain groups of customers.
ABI Director General Otto Thoresen said: “We want to see a balanced risk based regulator which oversees a market which delivers positive outcomes that meet consumer needs and expectations. This will only be achieved by maintaining a healthy level of consumer choice and market competition. Meeting this objective requires the Government and the regulator to recognise the inter-connectivity of a series of initiatives that form part of an overall package of reforms at both the UK and EU level. Any major change should not occur in isolation, but has to fit with the whole suite of existing and planned regulatory developments.
“We urge the FSA and the Government to ensure that the forthcoming ‘vision document’ for the Financial Conduct Authorty takes a holistic view that is focussed on delivering good consumer outcomes.”
