Friday April 1 2016

News Source: Fund Regulation

Focus: Other

Type: General

Country: European Union




The FCA has published its response to the European Commission Green paper on Retail Financial Services. The Green Paper’s aim is to work towards improving choice, transparency and competition in retail financial services for the benefit of European consumers

The FCA states that it is important for the Commission to monitor and assess how already agreed measures are implemented in order to address issues raised, and the potential gaps and challenges that remain. The agreed measures the FCA have in mind are primarily:

  • Markets in Financial Instruments Directive (MiFID II);
  • Markets in Financial Instruments Regulation (MiFIR);
  • the Mortgage Credit Directive (MCD);
  • the revised Payment Services Directive (PSD II);
  • the Insurance Distribution Directive (IDD);
  • the Payment Accounts Directive (PAD); and
  • the Regulation on Packaged Retail and Insurance-based Investment Products (PRIIPs).

The FCA is strongly supportive of disclosure measures being developed on the basis of a deeper understanding of consumer behaviour, and how consumers access, assess and act on information, which will vary depending on the product or service under consideration.

Inconsistent application and enforcement of standards persists across the EU, with detrimental effects on firm and consumer confidence. Ongoing work within the European Supervisory Authorities (ESAs) to achieve convergence of supervisory outcomes should help to tackle this uncertainty.

The FCA welcomes the opportunities offered by the increasing digitalisation of services and have found within their own experience (through ‘Project Innovate’) that collaborative working between the regulator with new and incumbent firms at the early stages of their development of innovative services has helped to ensure that consumer protections are factored into their product design.

Careful impact assessment of any new actions in line with the Better Regulation agenda, which takes a view on the consumer perspective and journey, will be required in order to better understand such risks. The FCA believes that the assessment should focus attention on the impacts for different consumer groups, for example vulnerable consumers and the digitally excluded, take into account diversity across Member States, and recognise where an existing system is working well.

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