Chancellor Rachel Reeves has set out significant reforms to be made to the Financial Conduct Authority (FCA) and Financial Ombudsman Service (FOS).
This includes an overhaul and replacement of the FCA Certification Regime which applies to staff below senior management level and a coming consultation on the advice-guidance boundary.
Reeves (pictured) announced the proposals at her first Mansion House speech last night, saying: “While the Senior Managers and Certification Regime has helped to improve standards and accountability, some elements of it have become overly costly and administratively burdensome.
“So the Treasury, the FCA and the Prudential Regulation Authority (PRA) will shortly publish the outcomes of our review, including a commitment to consult on removing the current Certification Regime from legislation.”
Subsequently, HM Treasury has added: “The government will consult on replacing the current Certification Regime, which applies to staff below senior management level, with a more proportionate approach that reduces costs so that businesses are freed up to focus on growth.”
Reeves also noted that the next stage in the FCA’s advice-guidance boundary review would be published shortly, adding that while advice was valuable, not enough people were able to access it.
“While regulation has been successful in improving the quality of financial advice being offered to consumers, many people do not get the help with their finances that they want and need,” she said.
“So the FCA will shortly consult on transformational changes to financial advice and guidance to ensure that people get the right support.”
FOS framework overhaul
Furthermore, Reeves also outlined an overhaul of the Financial Ombudsman Service (FOS) with the aim of reducing uncertainty in its decisions for customers and the industry.
A consultation on the changes is scheduled to be published today by the two regulators.
“The Financial Ombudsman Service plays a vital role for consumers to get redress when things have gone wrong, and that will not change, but reform is needed to create a surer climate for investment,” Reeves said.
“So we have worked closely with the FCA and the ombudsman to develop a new agreement between the two institutions with clearer expectations on how they cooperate, including on historic market practice and mass redress events.
“And I strongly welcome their joint Call for Input, to be published tomorrow, which seeks to significantly improve the rules governing how the service operates.”
HM Treasury released further detail, adding: “The Financial Ombudsman Service framework will be modernised so that it continues to play a vital role for consumers to get redress while giving clearer expectations around its decisions for consumers and for financial services firms.”