FCA will demand ‘better information’ on products, law firm
The incoming Financial Conduct Authority will demand firms return to an approach of treating clients like retail consumers and will force those packaging and distributing products to provide “better information” about what they are selling, according to law firm SJ Berwin.
Speaking at a conference in London today (17 May), Tamasin little, partner at the law firm, said that the pronouncements from FCA chief executive designate Martin Wheatley suggest the regulator will move away from “caveat emptor, buyer beware”.
Ms Little highlighted that in the past with dealing with financial promotions the Financial Services Authority has focused on the retail sector and the disciplinary focus was aimed at “correct information at balance”.
She said: “Institutions must know more about what they are selling... to give better information. That’s changing - it’s changing now and will change more in the future.
Ms Little highlighted that some investments will be “toxic” to retail public and that new powers will mean a more interventionist approach from the regulator.
She said: “The FCA will be given powers to ban them [products deemed ‘toxic’]. This will be a power and not just leaning on them behind the scenes and will publicise if something needs to be withdrawn.”
On the transition to the new ‘twin peaks’ regulator regime, which will see power shared between the FCA as conduct regulator and the Prudential Regulation Authority as prudential regulator, Ms Little said that the FSA has already effectively bifurcated.
She said: “The FSA is already behaving in a ‘twin peaks’ fashion. Firms are having to be regulated by two regulators simultaneously, particularly if you are a bank or insurance company.”