New consumer authority takes responsibility for FOS and FSCS
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The new Consumer Protection and Markets Authority will take on responsibility for the Financial Ombudsman Service and the Financial Services Compensation Scheme.
Announcing further details of the new regulatory framework in Parliament today, Treasury financial secretary Mark Hoban said the CPMA would take on the FSA’s existing responsibilities for the FOS and FSCS, as well as overseeing the newly created Consumer Financial Education Body.
Hoban said the CPMA will regulate the conduct of all retail and wholesale firms, including those prudentially regulated by the Prudential Regulation Authority.
Hoban told MPs the CPMA would “take a proactive role as a strong consumer champion”.
He said: “It will have a strong mandate for ensuring that financial services and markets are transparent in their operation, so that everyone – from someone buying car insurance to a trader at a large bank – can have confidence in their dealings, and know that they will get the protection they need if something goes wrong.
“The CPMA will regulate the conduct of every financial service business, whether they trade on the high street or trade in high finance. We need to ensure that this body has a tougher, more proactive approach to regulating conduct and its primary objective will be promoting confidence in financial services and markets.”
Hoban announced further details of the Financial Policy Committee, which will take on responsibility for looking for and dealing with macroeconomic and financial issues that could threaten stability. It will have the power to require the new Prudential Regulation Authority to implement its decisions. An interim FPC will be set up in the autumn, ahead of legislation.
Bank of England governor Mervyn King will chair the new committee which will be directly accountable to Parliament. Other members will include the deputy governors for monetary policy and financial stability, the new deputy governor for prudential regulation and the chair of the CPMA.
Hoban pledged to publish a detailed policy document before the Summer recess before a full consultation process with the necessary primary legislation passed within two years.
He said the Government was committed to minimising the uncertainty and transitional costs for firms and maintaining a strong regulatory focus during the period of transition.
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Readers' comments (15)
Exasperated me | 17 Jun 2010 4:04 pm
The merry-go-round goes 'round and 'round,
The children laughed and laughed and laughed,
So many were going 'round and 'round,
That the merry-go-round collapsed.
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paolo standerwick | 17 Jun 2010 4:06 pm
Question
Will the CPMA work within the law? Or will it make it's own laws?
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TERRY | 17 Jun 2010 4:07 pm
I suppose that who ever is in charge of this organisation will try and say he is worth more than £500,000 salary plus expenses plus gold plated pension scheme to include the annual subscription to whichever fat cat club they belong to.
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acc | 17 Jun 2010 4:07 pm
See above "The CPMA will regulate............." - surely this requires that Independent Advice has to be championed as opposed to pushing everything towards the banks propositions? Let's hope so..............
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Jane MacNally | 17 Jun 2010 4:20 pm
So it's the same thing but with a different name?
Nothing changes.......it just costs more.
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Anonymous | 17 Jun 2010 4:26 pm
The FSA is being split up to make more high paid workers under 2 different new bodies. This is a complete farse and is going to cost us an absolute fortune when we have to change all of our stationary to say we are regulated by 'not quite sure who' since we have now left the tripart system and joined quinpart system instead. Even the Bank of England are making new jobs for the Boys of the FSA.... Will there be any change - probably but not in favour of the broker. Why dont they just shut us all down instead of trying to push us all out. it will be quicker, easier and cheaper.
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M J Winfield | 17 Jun 2010 4:32 pm
42 years of failure in financial services regulation, implies it is about time for a change, however, if change means 'as before plus new stationery' then in 42 years what went round will have come back round.
Why is it that complex expensive regulation is seen as tough and simply clear inexpensive regulation as soft?
The entire system desperately requires change, the problem is will using the old heads from the FSA bring it about.
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Evan Owen | 17 Jun 2010 4:58 pm
THIS TIME AROUND
What matters this time round is the 'new improved' legislation, it MUST be compatible with common law, in particular Article 6. The new legislation MUST be scrutinised by the finest INDEPENDENT legal brains. The dissenting voices like Andrew Tyrie MUST be heard next time round.
Can we give the regulators the benefit of the doubt? Will the new legislation ensure that the staff and management of the new regulator treat ALL parties with the fairness every one of Her Majesty's subjects expects?
Finally, will someone promise the nation that this is the last major upheaval of regulation? I somehow doubt that, want to know why?
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Alastair Gordon | 17 Jun 2010 5:07 pm
I don't suppose there is any hope of a bonfire of the shambolic monstrosity so misleadingly described as a "Handbook"??
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Baron Bolligrew | 17 Jun 2010 5:15 pm
CPMA?
Does that stand for:
Centralised Profit Making Activity?
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