The Financial Conduct Authority (FCA) has released a transcript of a speech given by the Chair of the FCA and PSR, Charles Randell, which covers the idea of regulating finance for the entirety of the UK and what that would take.
Regulating finance is a broad topic and to say that you are looking to set in place regulation policies for the entire country is even broader. In his speech, Charles Randall goes over the main points of: the important of the consumer’s voice in regulating finance, policy partnerships between government and regulating authorities being crucial to delivering good outcomes, and the essential nature of the idea of the government respecting the independence and primary objectives of the FCA.
Each of these points will be broken down and expanded upon in our guide. Take a look at what the Chair of the FCA has to say about regulating finance across the UK.
The independence of the FCA
Randall starts by outlining the importance of the state of the FCA as it is right now. The UK Parliament has tasked the FCA with authorising and supervising financial businesses, which means a lot of back and forth between the two authorities. Randall points out the positives of listening to firms of all sizes to ensure balanced and effective regulation, without straying from the primary objective of the FCA to ensure customer protection in its work in regulating finance. There are a range of ways the FCA has attempted to allow these smaller voices to be heard, including the Financial Services Consumer Panel, the FCA consumer network and consumer research conducted by the FCA.
However, Randall points out that this is just the beginning. The FCA has plans to ensure better regulating of finance by casting a wider net: meetings with people outside the FCA to reflect the growing diversity in the UK, diversifying FCA offices, and growing offices in Edinburgh and Leeds as well as establishing a presence in Cardiff and Belfast to cover all nationalities, classes, races, and other significant cultures established in the UK.
To drive the point home, Randall quotes the Organisation for Economic Co-operation and Development, saying: “Regulators have a crucial role to play in the economy and society. They ensure that clean water runs in our taps, the lights remain on, and that financial markets are sound. However, they can fail to deliver these public services if their activities are unduly influenced, whether by the regulated industry, government, politicians, or outside interest groups.”
The importance of partnerships was not lost in Randall’s speech on regulating finance in the UK. He says that it is essential to the purpose of the FCA and that the FCA has plans to partner with a range of actors, including Government, Parliament and other regulators.
The FCA plans to extend regulating finance in the UK with the help of partners who promote the understanding of financial decisions from school to the point of sale, who address digital exclusion, and who fight financial crimes more effectively.
Randall stresses that the FCA is already on the path to these improvements, having strengthened partnerships with outside regulators and public bodies such as the Financial Ombudsman Service, the Financial Services Compensation Scheme, the Money and Pensions Service and The Pensions Regulator, plus digital regulators through the Digital Regulators Cooperation Forum.
The Financial Services and Markets Bill
In order to create a regulatory framework for regulating finance in the future, the FCA must take into account the upcoming Financial Services and Markets Bill.
The Bill is currently being debated in Parliament and will continue to be in the coming months, but it is set make significant changes to the relationships between financial regulators, including the FCA, and Parliament and Government. The law, which was announced in the Queen’s speech in May of this year, sets out to protect access to cash in a time when financial scams are rife. The bill aims to aid victims of financial scams by enforcing that banks reimburse the victims of authorised push payment fraud.
The Bill is likely to cause a change in the position of the FCA, which aims for the same outcome, but in an independent state. Considering the FCA was created to take over the role of the quasi-judicial body, the Financial Services Authority and was abolished due to its failure around the 2008 financial crisis, independence has rightfully so been at the forefront of the FCA’s mind when regulating finance in the UK.
As Charles Randall himself put it: “Although I recognise that the relationship between the FCA, Government and Parliament must change as a result of Brexit, and that decisions about the changes are for Parliament rather than me, I have some thoughts on how to make sure that the Bill achieves its aim as set out in the Queen’s Speech: ensuring that the financial services industry continues to act in the interest of all people and communities of the United Kingdom.”
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