Speaking at a Money Marketing round table discussion on the retail distribution review and new blood last week, Cummings said the FSA has no power to stop life companies based in Dublin paying UK advisers commission or IFAs based offshore accepting commission from UK-based life companies.
He said the FSA is working in “splendid isolation” from the European Commission, which is also working on a new structure for retail financial services.
Cummings said: “The FSA has to understand the European context that it operates in. It is not the biggest regulator on the patch and it should not pretend to be the biggest regulator on the patch.”
Beachcroft Regulatory Consulting managing director Richard Hobbs said it is unclear whether the FSA can impose restrictions on business coming in from abroad.
But he added: “If they cannot, then I think a number of providers will be looking at basing themselves in Dublin. UK consumers might be wary of foreign brands but where an existing UK brand went offshore, that would be a different matter.”