- Plans to tear up consumer rules in bid to unleash new risk culture
- Reforms proposed by Financial Services CEO Nikhil Rathi
- They were signed by the Treasury last week and will be put to the House of Commons.
Breaking through bureaucracy: Nikhil Rathi
Britain’s financial regulator today unveiled plans to break down bureaucratic silos in the City, making it much easier for consumers to access investment services.
The plans to scrap consumer rules and put more emphasis on outcomes such as value for money are aimed at creating a new risk culture and improving Britain’s competitive position against rival markets in New York.
The reforms proposed by Nikhil Rathi, chief financial officer of the finance sector, were approved by the Treasury late last week and will be presented to the House of Commons today.
Rathi told the Ny Breaking the changes are aimed at removing obstacles that have hampered riskier investments in Britain, hampered the London Stock Exchange’s ability to secure investor support for initial public offerings and made it harder for British companies to do international deals and raise funds on secondary markets.
“There’s been a huge amount of reform here at the FCA,” Rathi said. “I think we’ve really moved to a different way of working. We’ve set the bar quite high in terms of consumer protection with outcomes-based regulation,” he added.
He believes that it is now time to give consumer organisations the opportunity to express their views on the relaxation of the protective measures.
Among other things, Rathi has not abandoned his controversial proposal to “name and shame” individuals and companies under the watchdog’s watchdog, which drew vocal criticism of the FCA when it was unveiled ahead of the election campaign.
The FCA expects to make a proposal in the autumn, after considering responses from the City, Whitehall and consumers.
“We are moving to a more disclosure-based system. That will allow investors to decide whether they want to back founders and companies, which is the dominant approach in other markets.
“There will be more emphasis on investor oversight and engagement with investors and boards,” Rathi said.
Last July, the FCA introduced a consumer duty, an obligation on companies to be transparent about potential pitfalls in the products they sell.
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