Ps and lords want the Financial Conduct Authority’s strategic objective changed from focusing on confidence in the financial system to fairness and transparency.
Currently, the draft bill sets out the FCA’s strategic objective as to “protect and enhance confidence in the UK financial system”. The FSA, the Independent Commission on Banking, and the Office of Fair Trading have all criticised the current wording, saying it is unclear and does not accurately reflect the FCA’s responsibilities.
There is also concern that the wording could lead to the FCA looking to boost confidence in the system by hiding or downplaying cases of consumer detriment.
The joint committee report says the FCA’s strategic objective should be amended to focus on “promoting fair, efficient and transparent financial services markets that work well for users”. It also recommends a clearer role for the FCA in promoting competition, including the ability to make market investigation references to the Competition Commission and the power to hear super-complaints.
Aifa director general Stephen Gay says: “Aifa has stressed that getting the regulators’ objectives right is hugely important in setting the strategic direction for the future. It is much more than an exercise in wordsmithing. We agree the role of the FCA must be to ensure markets are efficient and effective for both consumers and for firms.”