A number of hot topics in the regulatory landscape were covered by Andrew Bailey in his first speech since taking the helm at the Financial Conduct Authority (FCA). The regulator’s chief executive was addressing his organisation’s Annual Public Meeting on July 19.
In the consumer credit section of his speech, he referred to the unacceptable practices uncovered during the thematic review of payday lenders’ debt collection methods. He said that many firms had since made changes, and that he hoped all firms would make similar improvements. Mr Bailey also said the FCA was currently assessing the applications of debt management firms wishing to upgrade to full permission from interim permission.
Inevitably, Mr Bailey mentioned the Senior Managers & Certification Regime, which is already in force in the banking sector and which will be rolled out across the industry in 2018. The Regime will make firms responsible for verifying the fitness and propriety of their senior management. The FCA chief described the Regime as “the beginning of a new era of increased individual accountability”, before adding:
“[fusion_builder_container hundred_percent=”yes” overflow=”visible”][fusion_builder_row][fusion_builder_column type=”1_1″ background_position=”left top” background_color=”” border_size=”” border_color=”” border_style=”solid” spacing=”yes” background_image=”” background_repeat=”no-repeat” padding=”” margin_top=”0px” margin_bottom=”0px” class=”” id=”” animation_type=”” animation_speed=”0.3″ animation_direction=”left” hide_on_mobile=”no” center_content=”no” min_height=”none”][The new rules] will hold individuals working at all levels within relevant firms to appropriate standards of conduct and ensure that senior managers are held to account for misconduct that falls within their area of responsibility.”
Regarding payment protection insurance (PPI), Mr Bailey promised to issue a response “shortly” to the recent consultation regarding a possible deadline for making a mis-selling claim.
Next, he described the area of retirement provision as “the biggest single challenge ahead in the provision of financial services in this country”. He spoke of the measures the FCA has introduced since the advent of the pension freedoms, such as requiring providers to give risk warnings to clients, and proposing a cap on pension exit charges.
As regards the FCA’s competition objective, he reminded his audience that the regulator had named and shamed firms offering the lowest savings interest rates, and was also proposing new ways of improving the way credit card firms deal with customers in severe debt trouble – at present card providers often find that these customers are very profitable and thus have little incentive to assist them.
Mr Bailey then turned his attention to enforcement issues, and commented that, in the last year, the FCA had imposed its largest fine for retail conduct failings when it fined Lloyds Banking Group £117 million for PPI complaints handling deficiencies. It has also imposed its largest anti-money laundering fine in recent months as well, when Barclays was fined £72 million.
Inevitably, the issue of the referendum result came up in his speech. Mr Bailey highlighted that European directives continue to apply for the present at least, and expressed the hope that the UK could retain access to the European single market in the future, as in his words “healthy competition in UK financial markets is supported by cross-border trade.”
Finally he said that the FCA was working on producing a mission statement, which he described as “vital to enable effective public accountability and in doing so to establish a stronger public understanding of the role of the FCA.” This mission statement is expected to be published in autumn 2016, following a public consultation.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.[/fusion_builder_column][/fusion_builder_row][/fusion_builder_container]