Understanding Regulatory Strategy in Financial Services

Felix Thomson

Content Executive

The Financial Services Forum

Malcolm Small introduces the Forum’s new regulatory strategy special interest group
Regulation is a fact of life in retail financial services. All too often, we concentrate on the implementation of compliance and miss the bigger messages being sent to us about public policy contained in regulation. We are also impacted by government departmental regulation – a current example being the changes around “A” day – as well as EU directives. Again, messages about future directions are all too often missed, or ignored as frightening or inconvenient. This can be particularly the case in marketing and distribution, although all areas of the business, from corporate communications through to administration, are affected. How can we better understand the strategic impacts of regulation for all aspects of our business going forward? How do we engage effectively with regulators, government and Europe to present an informed view of the likely effects of developing policies?
The Regulatory Strategy SIG is intended to be a safe space in which to start building this
understanding. It will seek to:
• Identify the changes in future strategic direction implicit in regulation and policy.
• Consider how these changes will impact all aspects of our business.
• Assess the practical implications, if they are implemented.
• Identify which areas of our business would need to change, and how.
• Engage with other bodies in our industry, and with policy makers, to give expression to these
The list of topics to be addressed is substantial indeed. The urgent issues include:
Treating customers fairly: The first example of the FSA’s new “principle-based” approach to legislation
has resulted in a wide range of responses from an industry used to regulatory prescription. What are
the implications for distribution – and in particular IFA distribution – of complex, high-risk, products?
How do corporate and marketing communications need to change? What are the messages for
product design? How will principle-based regulation roll out?
Mortgage and general insurance review: The FSA has announced that this will take place in the spring of 2006. What lessons can we, and policymakers, learn from the story so far? What changes are needed? Has it worked, or has it just bombarded consumers with more unintelligible paperwork? What effects will continued regulation have on the markets for these products?
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