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Wheatley: Regulated firms not subsidising Project Innovate

The regulator’s Project Innovate does not impose an unfair subsidy on regulated firms to support those seeking authorisation, says FCA chief executive Martin Wheatley.

In a speech at Financial News’ Fintech conference in London today to mark the launch of an ‘innovation hub’ aimed at supporting the development of new products, Wheatley said there is a fear in the market that the project gives innovators “special treatment” and is subsidised by other firms.

He said: “We are indeed focused on giving extra support to innovators. Innovation can bring benefits to consumers and our mission is to markets work well for consumers.

“Also, innovators have a particular need for our help in navigating regulation. They are less likely to fit neatly within existing regulatory categories.

“I think the fear is rooted in misconceptions about this work. For a start, regulated firms are in scope.

“As well as this, the largest firms already have direct access to the regulator through their supervisors. What we are doing here is going some way to redressing that imbalance. I certainly don’t see that as unfair.”

Wheatley said the innovation hub, which is open to both regulated and non-regulated firms, will have two main strands to its work: giving direct support to innovators, and considering how the FCA should adapt its regime to promote innovation.

He said the direct support will include giving “informal steers” to firms seeking guidance.

He said: “This is different from more formal guidance – firms will rely on what we tell them at their own risk. But it means we can share our thinking a lot more quickly.”

Wheatley said the FCA will also work with firms to test innovative tools.

He said: “We will begin with new approaches to disclosure. Behavioural economics is being used by big banks and others. They are developing new ways of giving information to customers.

“We want to work with these firms to see if, for example, customised videos are more effective than ink and paper. We will then use what we learn to update our rules.”

Wheatley added that the regulator’s commitment to innovation is not a “fad”.

He said: “Project Innovate is here to stay. Our commitment to fostering innovation in the interests of consumers is not a fad. It is now an important part of our regulatory philosophy.

“Opening our Innovation Hub is the first concrete output. But we will continue to adapt our approach. We will keep an open mind about what else we can do.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Project innovate – what a complete utter load of old tosh.

    Mr Wheatley – try reducing the rule book to something that the average human can read in 30 minutes and understand. Then reduce the fees to a level where business actually makes sense for those starting out. Then take away the threat of retrospective regulation.

    Then watch the innovation happen all by itself.

    Scared businesses do not innovate.

  2. Why don’t these people just get their day job correct rather than invent things for themselves to play with? Almost as good as intervening in funds. Where did that come from and which crack pot actually thought that up?

    Innovate?

    What would that mean?

    Not trying to encourage complaints against IFA’s? Particularly in failed funds where they (the FCA) knew of wrongdoing?

    Not briefing the FOS to find in favour of all complainants, whatever the circumstances?

    Not mis-briefing the Police? (Oh and having to admit that they sat on evidence of fraudulent activity for 18 months and did nothing with it)

    Not Mis briefing MP’s?

    Not Mis Briefing Ministers?

    I could go on, but that would be innovation of itself.

    This organisation is out of touch of reality and seemingly acting above the law. Time for change. Let’s hope the politicians somewhere grow a pair and make a manifesto promise to close this systemically corrupt organisation, replacing it with one that is new and genuinely interested in investor protection rather than protecting its own self-interest.

    Now, that would be Innovating!

  3. Who’s paying for it then? Somebody has to.

  4. Its quite simple really; if you need to set up a dedicated team to help people and companies to circumnavigate the regulators rules and procedures, then by default you can quite simply deduce the rules and procedures are not fit for purpose !! and to be perfectly honest I am not convinced the FCA themselves can interpret the rules correctly ?

    I cannot and do not accept that the cost of all this does not, in part or in full fall upon regulated companies, unless Osbourne is letting you keep some of the fine money, but if that’s the case it should be used to lessen our burden !

    I think you mat be trying to pull the wool over our eyes Martin ?

  5. Julian – it’s magic money – Martin just says how much he needs and it appears – as if by magic. He has no idea where it comes from and assumes that because it comes to him so very easily that it must be very very easy to make. I mean, when you are earning £800K plus it becomes difficult to understand why some firms might object to paying £10-£20,000 in FCA fees and the same again in compliance costs. It’s pocket change to this man and really nothing to concern yourself with.

  6. @Julian

    We are! Just like we are paying for the office move, flowers, decoration, Wheatleys paycheck.

    We are a bottomless pit of financial resources to be mined as the FCA sees fit. Used to pay for the next fad they come up with.

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