FCA vows to take action on ineffective competition

The Financial Conduct Authority (FCA)’s mission to ensure effective competition while protecting consumers’ interests represents “the single most significant change” in the regulator’s approach, chief executive Martin Wheatley (pictured) said today.

Wheatley’s comments accompany the publication of the FCA’s latest guidance on how it intends to deliver its statutory responsibilities, The FCA Approach to Advancing Its Objectives.

The FCA has said it will examine whether consumers are in a position to drive healthy, competitive markets and, if not, what needs to change. This will include how easily new businesses can enter the market, whether existing regulation distorts competition, and the ease with which consumers can understand their needs, access suitable products and change suppliers.

Market priority

Wheatley said: “Markets that work well for consumers and firms benefit everyone, and benefit the UK economy. Our competition mandate is the single most significant change in our objectives as a regulator.

“This is important because in a more competitive environment, with firms meeting the needs of engaged and informed consumers, consumers will be better off. Competition can lead to lower prices, greater innovation, better design, better quality and wider choice, which ultimately leads to growth in the economy. This benefits everyone.”

The FCA has said it “will not hesitate” to take proportional action to enhance competition where the regulator has, after detailed analysis, identified where competition is ineffective. This could be through industry self-regulation, enhancing consumer awareness, introducing rules, or changes to existing rules, to support competition or action against regulated firms.

The new guidance is based on the FCA’s three operational objectives of protecting consumers, ensuring market integrity, and promoting effective competition. It sets out what firms and consumers can expect from the regulator.

It reaffirms that the FCA will seek to be more judgment-based in its actions, dealing with potential issues at the earliest possible stage.