The Association of British Insurers (ABI), Consumer Focus, Finance and Leasing Association (FLA) and Which? has responded to the Government's Financial Services Bill published today, the legislation which will fundamentally transform and strengthen financial regulation in the United Kingdom.

Please see: Government publishes Financial Services Bill

Otto Thoresen, Director General of the ABI said:

"The first reading of the Financial Services Bill is an important milestone in the move to twin peaks regulation. We are pleased to see that the new conduct regulator's main focus will be on making sure that financial markets work well. The FCA must promote positive outcomes for consumers, rather than just focus on avoiding negative outcomes.

"Firms now need a clear and realistic timetable for the remainder of the transition which takes in secondary legislation, as well as the parliamentary stages of the Bill, and includes a period for firms to update their systems and customer communications. The FSA must ensure that they do not overburden firms in the transition as it is vital that we get the right result on initiatives including Solvency II and the Retail Distribution Review."

Sarah Brooks, Director of Financial Services at Consumer Focus said:  

‘This is a once in a generation opportunity to reform our financial regulation and it is vital we get it right. Consumers have been losing out for too long. It is important that the Bill ensures that all of the regulatory bodies are clear on their responsibilities and powers from the offset. 

‘Particularly welcome steps include early interventions on banning products. This should help stop many of the issues which have been endemic in this market in recent years. Transferring responsibility for credit over to the Financial Conduct Authority is also a good common sense move.

‘The clarity of the FCA objectives on promoting competition is significant. Competition is not an end in itself, it must deliver benefits for consumers. The detail in the Bill gives some hope that this has been recognised and the new regime will work towards promoting effective competition to make sure consumers get a better deal.'

Responding to the Treasury announcement that consumer credit regulation will be transferred to the new Financial Conduct Authority, Stephen Sklaroff, Director General of the Finance & Leasing Association (FLA), said:

"The Government is right to recognise that any new consumer credit regulatory regime must be proportionate, risk-based and reflect the diversity of the market. We note that a transfer of responsibility to the new FCA will be subject to impact assessment and further Parliamentary scrutiny. We look forward to working with the Government on a framework which ensures consumers continue to benefit from a wide range of responsibly-provided credit." 

Which? chief executive, Peter Vicary-Smith, says:

"Which? is delighted the government has listened to our calls for a tough financial regulator that fights on behalf of consumers. This is why we launched our ‘Watchdog not Lapdog' campaign, as people told us they want a regulator that stands up to industry.

"The transferral of consumer credit to the FCA means it can give greater scrutiny to this market and encourage responsible lending, but the government needs to make sure it has these powers as soon as possible. The regulator must be strong, open and proactive, with consumer protection and the promotion of effective competition at the heart of everything it does. The FCA needs to deliver on its promises."

You can also read responses from the British Bankers’ Association and Financial Services Consumer Panel (FSCP):

New era for Banking - British Bankers' Association welcomes Financial Services Bill

Panel welcomes intention to transfer consumer credit regulation to the FCA