Consumer groups have called for the Financial Conduct Authority’s strategic objective of ensuring confidence in the markets to be replaced with one which outlines how the market should operate.
Under current proposals, the FCA’s strategic objective is to protect and enhance confidence in the UK financial system.
Giving evidence to the Treasury select committee last week, Which? chief executive Peter Vicary-Smith said the objective needs to be reformed.
He said: “Confidence is an outcome, not an input. The strategic objective should be about a fair and transparent financial market and confidence will come from that.”
Consumer Focus chair Christine Farnish said the strategic objective should ensure markets are “effective and efficient”. She said the competition objective could lead regulators to be risk-averse and not intervene in problems in case it undermines confidence.
Citizens Advice Bureau chief executive Gillian Guy said the objective should include a commitment to fostering financial inclusion.
In a Treasury select committee hearing earlier last week, FSA chairman Adair Turner also called for the strategic objective to be changed. He said it should be based on “efficiency, fairness and consumer protection”.
The FCA is set to discharge its duties in a way which promotes competition unless it clashes with its other objectives. The TSC and the Independent Commission on Banking have both called for this to be made a statutory objective.