The consultation paper says that while the FCA will be not be a regulator in the sense of prescribing returns for products or services, it will look at price and margins as “key indicators of whether a market is competitive”.
“The FCA…will consider exercising its powers to take action where costs or charges are excessive. There are currently rules on excessive charges for mortgage arrears; and the FCA could, for example, re-introduce rules on excessive charges for a wider range of investments.”
The regulator will look to build on the “new and intrusive approach” to the way firms bring products to retail markets, the paper said.
“The FCA will also intervene where the product may be well known and of utility to consumers but the sales and distribution process of a firm does not meet regulatory standards and consumer detriment is occurring,” the paper suggested.
“Where the FSA has typically allowed firms to continue to market and sell products alongside programmes to remedy poor practices, the FCA may not”.
The paper suggested that major suppliers of products may fall within this remit, even when this risks consumer choice or access being disrupted as a result: it pointed to the example of the Japanese Financial Services Agency, which in 2010 banned a firm from advertising or selling retail products for a month.
The consulation period for the paper will run until 1 September 2011, the FSA said.
