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Turner wants revision of the FCA's objectives

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Senior figures at the FSA have called for changes to the statutory objectives of the Financial Conduct Authority.

In a Treasury select committee hearing this week, FSA chairman Adair Turner called for changes to the FCA’s main objective of enhancing confidence in the financial system, while FCA chief executive designate Martin Wheatley said its proposed competition duty should be strengthened.

Under current proposals, the FCA’s primary objective will be to protect and enhance confidence in the UK financial system. Its three operational objectives will be facilitating efficiency and choice in the market, securing an “appropriate degree” of protection for consumers and protecting and enhancing the integrity of the financial system.

Turner (pictured) said: “We are not convinced the most appropriate statement of the top-line objective of the FCA is enhancing confidence in the system. That seems to us as something which more logically fits with prudential regulation where the concept of confidence is important. The core focus of the conduct regulator should be about efficiency, fairness and consumer protection.”

The FCA will also have a duty to discharge its duties in a way which promotes competition unless doing so would conflict with its other objectives. The objective was added into the proposals for the draft Financial Services Bill but was not in earlier consultation papers.

The Treasury select committee and the Independent Commission on Banking have both called for competition to be a primary duty of the regulator.
Wheatley told the committee he wants a “clearer and stronger” competition role.

He said: “We would like a responsibility that has a clear operational objective for promoting effective competition in the markets for the benefit of consumers. We want a stronger, clearer role so we would have the ability to step into cartels and price areas we feel are unfair.”

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Readers' comments (2)

  • Since when did the FSA take a blind bit of notice of anything statutory (such as the Code of Practice For Regulators), other than when it suits its own purposes to do so?

    The FSA's approach to matters statutory is that unless something is explicitly and specifically prohibited by statute, then the FSA can just go ahead and do it without reference to anyone but its own board. The government's recent announcement that the FCA, like the FSA before it, will be accountable only to its own board looks set to perpetuate this deeply unsatisfactory state of affairs.

    And, on the issue of greater accountability, all Lord Turner has to say is that if we try to impose greater accountability on the FSA, it'll cost us dearly. That's a bit like a mad dog snarling viciously at the sight of a leash and muzzle.

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  • We want a stronger, clearer role so we would have the ability to step into cartels and price areas we feel are unfair.”

    Does this include the unfair practice of charging well-off clients more in order to cover the cost of maintaining a free advice service to the less-well-off as supported by Linda Woodall?

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