This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. Find out more here.
X
MM-Cover-Top-240714.jpg
Categories:Politics,Regulation

FCA will have power to ban products for a year

  • Print
  • Comments (1)

The Financial Conduct Authority will have the power to place restrictions on or ban products outright for a year, under new Government proposals.

The draft financial services bill proposed giving the FCA the power to ban products for up to 12 months without consultation or a cost benefit analysis. Despite pressure from industry for the power to be scrapped, according to the financial services bill’s explanatory notes, published today, the regulator will keep the power in cases where it considers products pose a risk of mass consumer detriment.

It says: “The power is intended to enable the FCA to impose restrictions in relation to specified products, or to ban them outright, where the FCA considers this is necessary or expedient to advance the consumer protection or the competition objective.

It adds: “Consumers who have entered into agreements concerning “products” that are later “banned” or “restricted” would not be able to rely on new rules (that postdate their contracts) in order for their contracts to be rendered void and to establish their automatic entitlement to a refund or compensation.

“They may also include specifying a class of consumer who may not be exposed to a particular product, or should only be exposed to it if certain conditions are met.”

In September, Investment Management Association director of wholesale Guy Sears said the product intervention powers, as laid out in the draft bill, were “fantastically wide ranging”. He said: “It puts enormous stress on trusting that the regulator will use those powers sensibly and fairly.”

In November, the Association of British Insurers director of life and savings Maggie Craig said she was not convinced the product intervention powers were necessary and suggested they should be scrapped.

This bill could still change significantly as it goes through Parliament and MPs propose amendments.

  • Print
  • Comments (1)

Daily Email Updates
If you enjoyed this article, sign up to receive the latest news and analysis from Money Marketing.

The Money Marketing CPD Centre
Build your annual CPD - you can log and plan your CPD hours for free with The Money Marketing CPD Centre.

Taxbriefs Advantage
Advantage is a digital reference source giving unbiased, independent, answers to your technical queries. Subscribe to Taxbriefs Advantage.

Readers' comments (1)

  • At face value this is something that is well overdue. There has been too much emphasis in the past on the inappropriate sale of products rather then the inappropriate creation of products. Manufacturers have to take shared responsibility rather then setting up the advisory community and consumers for a fall...

    Unsuitable or offensive? Report this comment

Have your sayEdit my profile/screen name

You must sign in to make a comment

The Cost of Advice

Sponsored by Brooks Macdonald

Fund Data

Editor's Pick



Poll

Do you think advisers will benefit from Chancellor George Osborne's guidance guarantee?

Job of the week

Latest jobs

View all jobs

Most recent comments

View more comments