New product intervention powers for FCA
Wednesday 27 March 2013 11:36 AM
The new temporary product intervention rules will allow the FCA to take action to restrict the use of certain product features, require a product not be promoted to some or all types of customers, or – in the most serious cases – prevent a product from being sold altogether.
Some of the instances in which the FCA might consider making temporary rules (which do not require any previous consultation) include:
- Where a product is in serious danger of being sold to the wrong customers, for instance where complex or niche products are sold to the mass market
- Where a non-essential feature of a product seems to be causing serious problems for consumers
- Where a product is inherently flawed.
Rules made before consultation would last for no longer than twelve months and could not be renewed. During this time, the FCA will either consult on a permanent remedy or will work to resolve the problem another way.
Martin Wheatley, chief executive of the FCA, said: “The creation of the FCA is our opportunity to reset conduct standards. This power, along with our other new powers, helps define how we will regulate going forward. We know that some in the industry are concerned about us using this power too hastily; I want to be clear that we know proportionate judgement is needed, and that is what we will exercise. I do not expect us to use this power frequently, but both industry and consumers need to be clear that we will not hesitate to use these powers where we have serious concerns.”
For further information or to download the PS click here.