The UK Financial Conduct Authority (FCA) has today set out more detail on its regulatory approach to competition. It follows the launch of the FCA’s Mission and a commitment to publish a series of documents explaining the regulator’s approach in more detail, starting with the publication in November of the FCA’s approach to consumers.
In this latest publication, the FCA has set out its role and powers including the use of calls for input, market studies and Competition Act investigations, the different kinds of intervention and remedies available, and the decision-making framework used to determine when to intervene in a market.
Antti Lemberg, working in Frontier’s Financial Services team, said: “The FCA’s publication of its Mission and follow-on documents has been a helpful process, providing greater clarity on the way the FCA thinks about intervention. The real challenge for the FCA is ensuring that it is as efficient as possible in diagnosing problems and creating remedies that deliver benefits to customers, especially where there are behavioural challenges to address like inertia. One part of better diagnosis could involve the FCA thinking further about a framework that targets areas with suspected behavioural issues which it believes can be remedied without conducting a full market investigation. Better remedies mean moving beyond disclosing more information to customers toward solutions that might address what is often the underlying issue – a lack of engagement from customers. To date the FCA has taken steps to account for behavioural responses in remedy design, but the current market investigation process often leaves very little time to do proper trialling and assessment of what actually works.”
Frontier advises clients on a wide range of regulatory issues in financial services.
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