This post was written by Christopher Walker.
The FCA has published its “Call for Input: The Consumer Investment Market” (“CFI”) with a focus on reducing harms currently present in the consumer investments market, a key priority in its 2020/21 Business Plan.
The CFI requests views around four key headline issues:
- Making the mass market work well
- Higher risk investments
- Fair compensation
- Competition and innovation
The FCA is particularly interested in key questions on topics such as improving the market’s ability to offer a range of products which meet “straightforward investment needs”, improving the communication of risk in relation to high-risk products and the relevant regulatory protections available to consumers – including ensuring appropriate compensation for consumers who lose money owing to the “act or omission” of a regulated firm is more readily available before recourse via the Financial Services Compensation Scheme.
Opinions are also sought on the use of the high-net worth and sophisticated investor exemption under the financial promotion regime, as are views on the appointed representative regime and concerns around the “effectiveness of the principal model in some sectors” in relation to oversight and control.
Protecting consumers from scams, which are unfortunately on the rise during the pandemic, remains a critical area of focus.
The deadline for responses to the CFI is 15 December 2020 via the response form available here - the responses received will be shared with the Government and shape the FCA’s work over the next three years.
'The consumer investment market is not working as well as it should. There have been too many scams and scandals and too often consumers are offered unsuitable products or advice. As a result, many consumers lack confidence in the investment market. 'This call for input is aiming to help shape the future of consumer investments, including regulation, to ensure consumers can have faith in the market. 'We’ll be considering all contributions carefully as we open this debate on the future of the consumer investment market.' The FCA’s Interim Chief Executive, Christopher Woolard