Yudu - Journey to the FCA

INTRODUCTION

BY MARTIN WHEATLEY

All problems have root causes. It is not always easy to trace the source of these problems and tackle them at their core, but this is what the Financial Conduct Authority (FCA) intends to do.

The FCA has three purposes. It is responsible for ensuring that markets operate with integrity; promoting effective competition; and requiring firms to put the well-being of their customers at the heart of how they run their business.

High standards of conduct in wholesale markets have always been important. Choices made and actions taken in markets can reverberate throughout the system and affect all of us. In today’s complex, interwoven, international and domestic financial marketplace, high standards become ever more important. In recent years we have seen markets that have grown in complexity and now provide a proliferation of choice for all types of customers, both retail and wholesale.

The creation of the FCA is our opportunity to reset conduct standards for the financial services industry.

As a retail customer you expect some things to be simple and straightforward. Most of us want bank accounts where we can keep our money safe; mortgages that enable us to buy our own homes; and to be able to set aside savings for holidays, our retirement, or other significant life events.

And when we take out that bank account, we expect there to be no hidden charges. We expect a mortgage that is affordable and financial products that are suitable for our personal circumstances.

Meeting fair and reasonable expectations like these should be at the centre of how firms operate – firms should see it as their responsibility in the first instance, not the responsibility of the regulator. This should be demonstrated through the way they treat their customers, their behaviour towards each other, and the way they operate in the market. This is what we mean by ‘conduct’ when we talk about the new FCA.

So from the boardroom to point of sale and beyond, firms’ behaviour, attitudes and motivations must be about good conduct…

Things need to change; industry and the regulator need to rise to the challenge of that change. The creation of the FCA is our opportunity to reset conduct standards for the financial services industry. We are not starting from square one; we have made significant progress since the Government announced it would change the regulatory structure to make it operate more efficiently. Based on the proposed role and objectives for the FCA, we are creating an organisation whose vision is:

To make relevant (1) markets work well so consumers get a fair deal.

There are three broad outcomes we want to achieve. These are that:

• consumers get financial services and products that meet their needs, from firms they can trust;

• markets and financial systems are sound, stable and resilient, with transparent pricing information; and

• firms compete effectively, with the interests of their customers and the integrity of the market at the heart of how they run their business.

1 ‘Relevant’markets are: the financial markets; the markets for regulated financial services; and the markets for some other services that are provided by persons without requiring authorisation.

THE

Foreword by John Griffith-Jones

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

Click HERE to give us your feedback on this Chapter

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

Chapter 6: Maintaining effective relationships

Chapter 7: Accountability, transparency and measuring our success

Annex A: Specific questions for consultation

THE