Overlapping regulation by the Treasury and FSA has the potential to stifle
the financial services industry and must be included in Ron Sandler's
review, says the head of assurance at the ABI.
Francis McGee says Sandler has been presented with a golden opportunity to
take a look at the role played by the FSA and the Treasury in the
regulation of financial products.
He says Sandler must recognise the ability of the market to deliver
innovation and new products in response to customer demand without
unnecessary intervention from the Government or regulator.
The ABI opposes any product regulation that does not allow a diverse
market to develop. This includes price-capping through Catmarks and
kitemarks which could have the result of forcing non-kitemarked products
out of the marketplace, he says.
McGee is urging the review team to ensure it takes into consideration
changes in the marketplace such as the move towards self-regulation and
consumers having wider fund choice from providers.
The ABI says it has a list of criteria by which it will judge the outcome
of the review including regulation of product development and sales.
McGee says: “It would be an opportunity missed if the review does not
consider changes to the conduct of business regime of the FSA. At the
moment, you have got overlapping regulation which is almost certainly
reducing efficiency in the marketplace.”