RegulationNov 4 2015

FCA denies stifling innovation

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FCA denies stifling innovation

The Financial Conduct Authority’s director of general insurance and protection has defended the regulator, stating it does not stifle innovation.

Responding to a question from Louise Hanson, director of advocacy at the Association of British Insurers, the FCA’s Simon Green said: “In terms of does the regulator get in the way of innovation, I think the regulator is subject to innovation challenges as much as the industry.

“The rulebook is generally looking backwards, not looking forwards, but you can’t have a rulebook that is totally cognicent of anything that might happen; there’s a huge amount of change in the pensions industry.”

Responding to the same question at the ABI’s biennial conference yesterday (3 November), David Heffron, partner and head of financial regulation at Pinsent Masons, agreed “the regulator does not get in the way”, adding that it has generally been encouraging of firms “pushing the envelope”.

Mr Green added that the FCA saw some of the industry’s upcoming challenges could also be viewed as opportunities.

He said: “These are not pronouncements of where the regulator will be focusing a thematic market study in work going forward, more generic areas of potential interest, but I think there are a number of themes in terms of the work we are doing at the moment which will carry forward.

“We’ve seen for example the extension of the senior managers regime across all financial services and we have the initial disclosure document, which will be coming next year. I think both of those are opportunities rather than challenges.”

Last month, the Financial Conduct Authority’s acting chief executive Tracey McDermott said a sustainable approach to regulation, which breaks the “regulate, de-regulate, repeat” cycle is critical.

Ms McDermott said: “We are often told that boards are now spending the majority of their time on regulatory matters; this cannot be in anyone’s interests. If that continues indefinitely we will crowd out the creativity, innovation and competition which should present the opportunities for growth in the future.”