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CPMA will have power to ban products

The Consumer Protection and Markets Authority will be given the power to ban retail products and notify investors of upcoming enforcement action against firms.

In an interview in the Financial Times today, Treasury financial secretary Mark Hoban (pictured) says the CPMA, to be renamed the Financial Conduct Authority, will be able to ban products or limit their distribution for up to 12 months.

Hoban says the FCA will have the power to warn investors of its intention to bring enforcement action against firms and individuals before they have been able to argue their case in an internal appeals process.

He adds the Government has renamed the regulator to emphasise its focus on the behaviour of banks, brokers and individuals. Earlier this month, the Treasury select committee called on the Government to scrap plans to promote the CPMA as a consumer champion, saying the phrase could mislead consumers.

Last month, the FSA published a discussion paper on product intervention, which suggested a “radical rethink” of regulation, including the introduction of price caps and bans on some retail financial products.

Hoban says the FCA will also be charged with increasing and fostering competition in the market and the Treasury is considering giving the regulator joint jurisdiction over internal competition enquiries, currently handled by the Office of Fair Trading.

In January, OFT chief executive John Fingleton told the Treasury select committee the regulator should have a statutory objective to promote competition.

Earlier this month, the outgoing head of Hong Kong’s financial regulator Martin Wheatley was appointed chief executive of the CPMA, now the FCA.

He will leave the Hong Kong Securities and Futures Commission in June and will join the FSA as managing director of its consumer and markets business unit in September, before becoming chief executive of the FCA when it launches in 2012.

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Comments

There are 13 comments at the moment, we would love to hear your opinion too.

  1. Blimey, the organisation has not even been set up yet, and it’s going to change it’s name already!!!!!!!

  2. Extract of a letter sent to the George Osborn.

    ( CPMA now to be FCA)

    I comment on a report stating that you said the CPMA will be a world class regulator.

    Oh Dear. !!!!

    Don’t make the same mistake as the Labour and its lack of understanding the FSA . The current and unaccountable ethos within the FSA is to aspire to be a world class regulator with this emphasis translating into an incestuous competition on out bidding Europe and the rest of the worlds regulatory bodies with little understanding of the consequence to the industry that they regulate and a loss of focus on actual consumer outcomes. FACT.

    Government should reset the mindset and promote that the new CPMA mandate is to empower and regulate a UK “World class financial services industry” with regulation that promotes innovation efficiency enthusiasm and a real focus on genuine consumer concerns and outcome.

    Getting the regulatory ethos the “right way round” will galvanise industry and regulator, rather than the current disconnect, and will resonate positively from the political perspective.

    Anything less will mean a continuation of well meaning but ill conceived regulatory priorities and initiatives that are bereft of common sense and jeopardise industry viability.

  3. Good grief ~ they’re making changes to the CPMA before it’s even been formed.. Sounds like it’s going to be a case of Meet the new boss, the same as the old boss. No mention, I note, of accountability.

    That aside, if the FCA is going to be as “independent” of government as the FSA is claimed to be, then why is Hoban forever making statements about the government’s plans for its powers and constitution?

  4. Thats a good start – having changed the name to something else before it is up and running.

    Public confused – You will be

  5. Hoban says the FCA will have the power to warn investors of its intention to bring enforcement action against firms and individuals before they have been able to argue their case in an internal appeals process

    GUILTY, until proven innocent.

  6. I used to despise Gordon…..until Hoban came along that is!!!!

  7. Mark Hoban has held his position since Dec 05, he is qualified as a chartered accountant. Knows chuff all about Financial Services.

    Mr C, Please put someone in the position that knows how Financial Services work in the real world

  8. I pity anyone with an FCA domain name!!

    CPMA was a dead duck anyway, how could a consumer champion also be a regulator… oh, I forgot about the FSA… and the FOS…. er.. and the FSCS.

    What’s in a name eh?

  9. Big Mac Hoban takes another bite 17th February 2011 at 11:15 am

    THE KING IS DEAD LONG LIVE THE KING.

    Q: What is the difference between the FSA and the FCA?

    A: They have replaced the “S” with a “C”.

    So Big Mac Hoban wants to call it FCA. This get even more like the FSA designing their own replacement especially when you look at the full membership on the RDR implementation committee. Hoban takes advice from a string of bankers, advisers to bankers and former FSA officials. This is a small club and guess who’s not in it – the IFA!

  10. Is it being renamed FCA so it is easier for him to remember I wonder as does not FCA stand for Fellow Chartered Accountant?

  11. What a surprise. More enlightened contributions on important issues. More hysteria is always welcome.

  12. Intervention at product design stage makes a lot of sense. I realise there is good reason for the doubt, rage and apathy expressed but IFA’s should not necessary condemn every action as a step in the wrong direction.
    I enjoy FSA bashing as it releases frustration if nothing else.
    That said, this step makes sense and with so many improvements required if someone moaned everytime I spoke to them I would ignore them – dont let that be the IFA comunity.
    The FSA have got it in the neck for failing to address issues early enough and this discussion papers looks at ways to address this.
    Hoban is a moron at best and Sants and Turner are out of touch with front line financial services provision but they will not roll over and play dead, not many would on on their salaries.
    A collective voice of reason is required to move forward in the right direction, so consider wider implications of ill thought comments, they do not help at such a critical time.

  13. I totally agree with Steven Balmer comments above we need to stop the endless destructive comments about the regulator, as we will never be taken serious, as a profession.

    I actually believe that this step is a very welcome one, as it will hopefully stop products like structured bonds for example. Just look at the amount of money that we have to stomp up in FSCS fees for bailing out Lehman Bros and Key Data. I would also hope that this new regulator will take action against banks and building societies that use inappropriate language in respects to investment products. I’m talking of the words like guaranteed or capital protected, as again we are paying the price for this marketing with the above failures.

    As Steve mentions above we as a community need to start engaging our brains rather than just attacking everything. I totally agree with freedom of speech the least try and come up with some constructive comments or we run the risk of been in a profession that will be ignored.

    I for one have written to my MP asking for products to be better regulated and indeed banned when necessary. I suspect other IFA’s may have done a similar thing and therefore you could say that the regulator is responding to feedback given. Just because you haven’t bothered to do the same doesn’t mean feedback is being taken into consideration.

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