The views expressed in this article are not necessarily those of the FIA. The article below was supplied by the Financial Services Conduct Authority (FSCA).
The FSCA is a regulator that encourages consultation and engagement. This is not simply because it is the right thing to do in order to ensure that laws are appropriate, achieve intended outcomes and avoid the unintended ones, but because we have an obligation to consult. This obligation to consult is now further entrenched under the FSR Act where statute dictates how we must consult, and for how long.
The industry is vast; it is made up of tens of thousands of financial institutions and hundreds of thousands of people, all offering different services and products with different views of best practice, bad practice and legislation, and all with their own vested interests. The FSCA cannot reach all these people, collate all their views, respond to all their issues and distill what is important into law without the aid of associations.
When we publish a piece of law for comment, we also send it to all the associations for input, including the FIA. The associations then consult with their members and give us comments. These comments are put into a matrix and we respond to each and every one. The comments through associations alone amount to hundreds of pages of input. If the FSCA had to receive individual comments only, which were not coordinated by associations, either one of two things would happen –
- We would receive no comment at all due to lack of coordination, or
- We would receive so many diverse comments that we would have to quadruple our staff just to cope
Both of these options would lead to poor regulation.
When we receive independent input, i.e. commentary that hasn’t passed through an association, it very often comes from a place of misinterpretation. A good association plays an invaluable role in interpreting the proposals for its members and determining the probable impact to drive a meaningful response. This not only makes life easier for the FSCA, but results in regulation that is more robust and effective.
An association with a focus on what is good for the country and the industry (and here transformation is a crucial aspect), what is good for the customer, and what is sustainable for its sector is also able to sift through and remove any vested interest that is contrary to the targeted outcomes. This way an association can submit proposals that the regulator is far more open to engage on.
So while the FSCA encourages engagement and input, and will obviously consider and respond to every comment wherever it comes from, we encourage this engagement and input through associations, which are able to speak with a single strong voice on behalf of all their members. This makes for more responsible regulation and supervision in the best interests of a sustainable, inclusive sector that treats its customers fairly.