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CPMA 22 September 2010 consultation deadline approaches!
This seems to be something that could easily be missed and it is not receiving a lot of press at the moment. HMT have published a consultation "A new approach to financial regulation: judgement, focus and stability" which sets out the Government's plans to reform the UK's financial regulatory framework, following on from the Chancellor's Mansion House speech.
Two Important deadlines for your diary:
The Treasury Select Committee (TSC) has launched an enquiry into the Government's proposals within this consultation to look at such questions as:
- Will the proposals improve the framework for financial stability in the UK?
- Do the proposals get the balance right?
- What costs will the new regulatory structure place upon consumers?
- To what extent will the regulatory and administrative burden increase for those firms who now have to deal with two regulators?
The deadline for submissions to the enquiry is 22 September 2010 and it is vitalthat ALL IFAs get their views known. Responses can be sent by email to: financial.reform@hmtreasury.gsi.gov.uk
Alternatively, they can be posted to:
Financial Regulation Strategy, HM Treasury, 1 Horse Guards Road, London.
SW1A 2HQ.
You only get one shot so make sure the response is reasoned, articulate well the points you wish to ensure are heard and remember spell check!!!
What's happening?
This document gives further detail on the Government's proposals and how they intend to deliver the changes.
As we know, the tripartite system is to be abolished and the FSA dismantled. The FSA is to be replaced with two new authorities:
- Prudential Regulation Authority (PRA)
- Consumer Protection and Markets Authority (CPMA)
In addition, a new Financial Policy Committee (FPC) will be established.
Consumer Protection and Markets Authority (CPMA)
The CPMA will be established as the single conduct regulator, taking a proactive and focused approach to regulating conduct in financial services and markets. The CPMA will regulate both retail and wholesale firms.
It will have as a primary objective - to ensure confidence in financial services with particular focus on protecting consumers and ensuring market integrity. However, there will be secondary considerations, such as the FSA's principles of good regulation and the Government is collating views on what these should now be.
Key functions of the CPMA will include:
- Making the rules which govern the conduct of firms
- Granting permissions for all regulated activities (that are classified as non prudential)
- Supervision and enforcement of compliance with the rules
- Approval of individuals to perform conduct related controlled functions
- Raising of levies to fund the activities of both the PRA and CPMA and the collection of fees on behalf of FOS, FSCS and CFEB (Consumer financial Education Body)
The FSA currently have powers to tackle a range of actions in relation to firms using OiVOPS (Own Individual Variations of Permissions). The Government is considering enhancing these OiVOP powers so CPMA can be tougher on firms to ensure more effective consumer protection.
The CPMA will adopt the FSA's new Retail Conduct of Business strategy and will continue with initiatives such as the RDR and Mortgage Market Review. Although they will maintain a separate market enforcement function, the government intends to consult on establishing a new Economic Crime Agency which will take on the prosecution of criminal offences involving insider dealing and other forms of market abuse and criminal law breaching (there will be a separate consultation later in the year).
The CPMA will also take over the FSA's existing responsibility for FOS, FSCS and oversee CFEB. Additionally the Government is considering whether to locate regulation for consumer credit with the CPMA rather than the Office of Fair Trading (where it currently sits). A consultation looking at this will be issued in the autumn.
What you need to do next
So that your views are known, please submit your comments (see details above) by the following deadline:
22 September 2010 The Treasury Select Committee (TSC) Enquiry submission
2nd important deadline for responses to this consultation is 18 October 2010 from the TSC.
So, load, take aim and fire!!!
* Extracts from AXA "The Expert"
Article last updated: Sep 1, 2010
Derek Bradley, CEO
Sarah Paul, Marketing Director
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