The FSA has played down the use of product intervention powers by the Financial Conduct Authority, saying they will only be used on a limited basis, with appropriate checks.
Under its product intervention powers, the FCA will be able to ban products from being sold, mandate specific product features to be included or excluded, or limit products being sold to certain types of customer or through certain distribution channels. The FCA says it will use these powers where products are inherently flawed or where there is widespread promotion or selling to unsuitable customers.
In September, FCA chief executive designate Martin Wheatley said the FCA will “shoot first and ask questions later”.
Speaking at the Tax Incentivised Savings Association annual conference in London this week, FSA head of asset management Ed Harley said: “I know it is of considerable concern within the industry. It moves the FCA to much more assertive territory than the FSA.
“We will not take these decision lightly, you can take that from us. It probably will not happen very often, it will be used at a very senior level and with the appropriate governance when we plan to use it. It should not be a concern for responsible, well-run firms.”
Jardine Finan Wealth Managers planner David Finan says: “The regulator should give guidance on the suitability of products during the developmental phase rather than intervening further down the line.”