The regulator said on Wednesday the aim was to draw up a set of objectives and a framework to help prioritise its work and allocate its resources as it purses its overriding goal of ensuring that the financial markets are working well.
It said the intention of the consultation was to: “provide clarity over the objectives, the methods to allow it to focus its efforts in the right places as well as explaining the reasoning behind the work the FCA does and a framework on how it chooses the tools it uses to do it.”
At the launch of the consultation, Andrew Bailey, the regulator’s new chief executive, said a key driver of the consultation was to improve accountability across the organisation and the transparency of its operations.
“Establishing and embedding a clear mission for the FCA is critical to our success, both as a regulator and to UK financial services as a whole,” Bailey said in a statement.
“We want this to be a very open process. Out of it, we hope that we can set out a clear path ahead for financial conduct regulation in the UK.”
The new consultation follows a call from the Cass Business School for the regulator to distance itself more from politics and the financial industry.
The call was made in a new report entitled ‘Cultural Change in the FCA, PRA & Bank of England: Practising what they preach?’, which was produced by Cass for a financial services non-profit thinktank called New City Agenda, founded by Lord McFall, Lord Sharkey and David Davis, who stood down as a director in July.
Authored by Sharkey and McFall, the report said: “Previous attempts to reform the FCA have been blown off course. Leadership changes and the perception of political interference were in danger of making the FCA into a timid and cowed regulator.
“Cultural change at the FCA should be the primary aim and responsibility of the new CEO. Andrew Bailey will need to demonstrate independence from politicians and the industry,” the report said.
For its own attempt at defining a future mission, the FCA has identified several key themes it is seeking feedback on. They include:
- Protecting consumers – in an environment where consumers are increasingly expected to take responsibility for their own financial decisions, what is the right level of consumer protection; and how does the FCA balance the responsibilities of firms and consumers?
- Vulnerable consumers – should the FCA prioritise the protection of vulnerable consumers and if so how?
- Delivering consumer redress – what should the role of the FCA be in redress schemes, for example in dealing with activity outside the FCA’s remit?
- When the FCA intervenes – how the FCA identifies harm and how it decides which approach to take to address it; and how can the FCA be clearer for firms, consumers and stakeholders on what it is doing and why?
- The scope of regulation – explaining the remit the FCA has for taking action and the circumstances in which the FCA may intervene with regard to unregulated activities;
- The interaction between regulation and public policy – explaining this interaction using examples including access to financial services and price discrimination;
- Competition, supervision and enforcement – providing clarity and seeking feedback on the FCA’s current approach to using its different regulatory powers and tools.