RegulationMar 27 2013

FCA emergency powers given green light

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The Financial Services Authority has set out how its successor the Financial Conduct Authority will act when it makes emergency rules to protect consumers.

Temporary product intervention rules are rules made before consultation, where the FCA identifies a significant risk to consumers which requires prompt action.

In a policy statement published on Monday (26 March) the FSA stated the FCA is allowed to take action such as restricting the use of certain product features, requiring that a product not be promoted to some or all types of customers, or – in the most serious cases – requiring a product not be sold altogether.

Some instances in which the FCA might consider making temporary rules include:

* Where a product is in serious danger of being sold to the wrong customers, for instance where complex or niche products are sold to the mass market;

* Where a non-essential feature of a product seems to be causing serious problems for consumers; and

* Where a product is inherently flawed.

http://www.fsa.gov.uk/static/pubs/policy/ps13-03.pdf