FSA to be abolished – Consumer Protection and Markets Authority to regulate all authorised firms
In his first Mansion House speech last night (16th June), Chancellor George Osborne announced that the Financial Services Authority “will cease to exist in its current form” by 2012.
Under the reforms, four new bodies will be created: a banking regulator operating under the Bank of England’s control; a Financial Policy Committee at the Bank; an agency to deal with “serious economic crime” and a Consumer Protection and Markets Authority. It is the latter of these which will take up the role of regulating the advice and sale of general insurance products.
Responding to the Chancellor’s speech, chairman of the FSA Lord Turner said: “The FSA now has the clarity of direction and time-scale as well as the leadership that we need to meet the challenges ahead.
“On retail customer protection, the FSA has recognised the need for a shift in our past approach, moving to the more interventionist approach which we set out in our recently published retail conduct strategy. The new Consumer Protection and Markets Authority will have a strong focus on this challenge, while also maintaining strong focus on conduct issues in wholesale products.”
Lord Turner recognises that some aspects of regulation, such enforcement activity, still need to be resolved.
He added: “But the overall future shape of financial regulation is now much clearer and we are in a strong position to create a future regulatory system which builds on the FSA’s achievements over the last few years of major change.”
FISC’s™ Managing Director David Smith says, “With a shift to a more interventionist approach, regulatory response to breaches will be much more swift. Dealers will need to make sure they are ahead of the game during the transitional period and beyond.
“User’s of FISC’s ™ FSA Tracker™ system and FSA Competency Training™ can rest assured that FISC™ will monitor the transition to the new regulator, and ensure that our systems remain the premier solution for front-line regulatory compliance and competency training within the retail motor sector.”