Today sees a change in the regulation of UK financial services, with the closure of the Financial Services Authority (FSA) and opening of the Financial Conduct Authority (FCA).
The Prudential Regulation Authority (PRA) was also launched today, to ensure the financial stability of larger financial services firms, such as banks and insurance companies.
Working together with the Bank of England, the FCA and PRA aim to ensure that regulated financial services firms behave properly and have adequate levels of cash to survive a crisis.
What this means for Informed Choice is that we move from being ‘Authorised and regulated by the Financial Services Authority’ to being ‘Authorised and regulated by the Financial Conduct Authority’.
As you might imagine, this will result in an expensive change to our stationary, office signs and other marketing material. Thankfully the FCA have granted a twelve month period of grace to make these changes.
It would be fairly easy to claim that little has really changed with the move from FSA to FCA.
Other than the ‘Services’ being replaced with ‘Conduct’ in their title, this new regulator will be based out of the same offices and have many of the same responsibilities. We understand that many of the people will also be the same.
Because we are a smaller firm, the FCA has categorised us as ‘C4’.
This means we are considered to be a low-risk and we will be supervised by a team of sector specialists, rather than having a dedicated supervisor.
We expect to have a ‘touch point’ with the new regulator at least once every four years. This might involve anything from an online assessment to a face-to-face interview with the regulator.
The FCA will also be responsible for our prudential regulation, making sure we are financially robust and well managed.
Failure of a P3 firm is considered unlikely to have a significant impact. It means the FCA will be monitoring us against minimum requirements.
We look forward to working with the FCA and will hopefully see them carry on much of the good work started by the FSA, including raising professional standards for regulated advisers.
What nobody wants to see from the FCA is them failing to spot the big market issues in time to prevent consumer detriment.
Hopefully a regulatory approach using earlier intervention will see the FCA banning dodgy financial products before they can do serious damage in the market.
Photo credit: Flickr/Odd.note
