- Plans to tear up consumer rulebook designed to unleash new risk-taking culture
- Reforms proposed by Financial Services chief executive Nikhil Rathi
- They were signed off by Treasury last week and will be presented to Commons
Tearing up red tape: Nikhil Rathi
Britain’s financial enforcer will today unveil plans to end bureaucratic box ticking in the City making it much easier for consumers to access investment services.
The plans to tear up the consumer rulebook and place new emphasis on outcomes, such as value for money, are designed to unleash a new risk-taking culture and improve Britain’s competitiveness with rival markets in New York.
The reforms proposed by Financial Services chief executive Nikhil Rathi were signed off by the Treasury late last week and will be presented to the Commons today.
Rathi told the Daily Mail that the changes are intended to end the roadblocks which have held back riskier investment in Britain, hindered the London Stock Exchange’s ability to gain investor support for initial public offerings and made it harder for UK firms to do international deals and raise funds on the secondary markets.
‘There’s been a huge amount of reform here at the FCA,’ Rathi said. ‘I think we have really moved to be operationally different. We have shifted the dial quite significantly in terms of consumer protection with outcomes-based regulation,’ he added.
And he believes it is now time to give consumer groups the opportunity to provide their views on how they feel about the easing of protections.
Among other things, Rathi has not given up on his controversial proposal to ‘name and shame’ individuals and firms under regulatory scrutiny. The proposal led to noisy criticism of the FCA when it was unveiled before the election campaign.
The FCA expects to report on its proposal in the autumn after studying responses from the City, Whitehall and consumers.
‘We are moving to a more disclosure-based system. That will allow investors to decide whether they wish to support founders and companies which is the predominant approach in other markets.
‘There will be more onus on the stewardship of investors and their engagement with investors and boards,’ Rathi said.
The FCA introduced a consumer duty, a requirement for firms to be upfront about potential pitfalls for products on sale, last July.
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