Yudu - Journey to the FCA

BUILDING OUR UNDERSTANDING OF THE MARKETS

Our new Policy, Risk and Research Division will act as the radar of our new organisation. It will combine research into what is happening in the market and to consumers with better analysis of the type of risks and where they appear. This will then drive the actions that we take across the organisation.

In summary, this new division will:

• identify and assess risks to consumers, firms and markets – both emerging and current;

• create a common view of the risks in financial markets to inform the FCA’s authorisation, supervision and enforcement decisions; and

• use the knowledge of these risks to make evidence-based policy(16) that changes behaviour.

How we will do this

We will gather and use a wide range of data, information and intelligence from across our organisation, firms and elsewhere to help us identify and assess risks in financial markets. This will include economic and market analysis, consumer complaints and enquiries, media analysis, and intelligence from consumer organisations and professional firms.

This means placing much more emphasis on gathering and using intelligence on consumer behaviour, experiences, concerns and risks than previously, with an increased focus on problems with basic products and services. By gathering the right information at the right time, we can identify risks to consumers early on and work on the issues that pose the greatest risk of harm. We can then take quicker action against the poor practices that are causing consumers harm.

Whilst whistleblowing is important, we will also seek out and listen to what firms, consumers and others tell us about poor behaviour in the marketplace. We will use this information to ensure our policies address actual concerns and experiences. We will be continually asking questions, and will be more curious about what is going on in the market, taking incisive action as a result.

Sources of intelligence

16 The Markets Division will retain responsibility for policy making for primary, secondary and over-the-counter (OTC) derivative markets, wholesale conduct and client assets.

We want to encourage firms and individuals to talk openly about issues they find and trends in the market. If we work together to address problems faster, this will help enhance the industry’s reputation and keep regulatory costs down in the longer term.

One of the many ways in which information is currently received about regulated firms, individuals and other market participants is through whistleblowing. People can make allegations to the FSA in a number of ways, including through a dedicated telephone line – 020 7066 9200 – or email – whistle@fsa.gov.uk – as well as face to face. The information received is analysed and investigated before a judgement is made about whether to take further action.

The FCA will continue to collect and act upon the intelligence received from whistleblowers wherever appropriate, and take each individual case seriously.

As this is a judgement-based process, there will inevitably be times where decisions are made that with hindsight, are incorrect. We will place significant value on whistleblowing alerts and seek to provide as much useful feedback to the whistleblower as possible, within the restrictions we are bound by.

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Foreword by John Griffith-Jones

Introduction by Martin Wheatley: Our vision for the Financial Conduct Authority

Chapter 1: The creation of the FCA: Spotlight on some of our new powers

Chapter 2: Protecting the perimeter

Chapter 3: Ensuring firms continue to meet our standards

Chapter 4: Taking action against firms that do not meet our standards

Chapter 5: Building our understanding of the markets

Click HERE to give us your feedback on this Chapter

Chapter 6: Maintaining effective relationships

Chapter 7: Accountability, transparency and measuring our success

Annex A: Specific questions for consultation

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