Radical reforms ready for take-off says FCA’s Rathi

The Financial Conduct Authority is ‘up for’ taking on greater risk and its more ‘radical’ reforms are ready ‘for take-off’ according to chief executive Nikhil Rathi. The regulator is aware that its move to a more outcomes-based regulatory approach brings risk as well as opportunity, Mr Rathi told attendees at a dinner at City venue Mansion House last night. He said: “The advice/guidance boundary review seeks innovation so people can access affordable support. But if that results in greater holdings in investments not cash, more will be at risk from short-term market volatility. “You have until Halloween to tell us how we can use the Consumer Duty to trim our rulebook. “Fewer tick boxes, less cost: no doubt welcome. “But if we streamline disclosure, affordability or product rules, will firms be spooked by taking responsibility for outcomes without the comfort blanket of rules or guidance?” He also told guests that there is “much more on its way” from the regulator, including more proposals which challenge both regulator and markets on risks they are willing to accept for growth. The regulator will make a decision on its controversial ‘name and shame’ proposals early next year, Mr Rathi added. He said that next month the regulator will provide more data and case studies on how a public interest test could work in practice. He said: “This is about firms not individuals. We hope to reassure the sector – here and overseas – that relatively few cases would be affected, given so many are already disclosed, mostly by firms themselves. “And where we decide to name a firm in the public interest, it wouldn’t by default be when an investigation starts. Unlike in many jurisdictions, our enforcement investigations typically follow at least a year of supervisory engagement. “We would give firms of all sizes longer to make representations about impact. And we know we have to be particularly mindful of impact on small firms. “We’ll continue to listen to feedback and our Board will decide early next year.”

Radical reforms ready for take-off says FCA’s Rathi

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