Senior figures at the FSA have called for changes to the statutory objectives of the Financial Conduct Authority.
In a Treasury select committee hearing this week, FSA chairman Adair Turner called for changes to the FCA’s main objective of enhancing confidence in the financial system, while FCA chief executive designate Martin Wheatley said its proposed competition duty should be strengthened.
Under current proposals, the FCA’s primary objective will be to protect and enhance confidence in the UK financial system. Its three operational objectives will be facilitating efficiency and choice in the market, securing an “appropriate degree” of protection for consumers and protecting and enhancing the integrity of the financial system.
Turner (pictured) said: “We are not convinced the most appropriate statement of the top-line objective of the FCA is enhancing confidence in the system. That seems to us as something which more logically fits with prudential regulation where the concept of confidence is important. The core focus of the conduct regulator should be about efficiency, fairness and consumer protection.”
The FCA will also have a duty to discharge its duties in a way which promotes competition unless doing so would conflict with its other objectives. The objective was added into the proposals for the draft Financial Services Bill but was not in earlier consultation papers.
The Treasury select committee and the Independent Commission on Banking have both called for competition to be a primary duty of the regulator.
Wheatley told the committee he wants a “clearer and stronger” competition role.
He said: “We would like a responsibility that has a clear operational objective for promoting effective competition in the markets for the benefit of consumers. We want a stronger, clearer role so we would have the ability to step into cartels and price areas we feel are unfair.”