Written by Hannah Jeckel
One of its three key commitments was to “promote competition and positive change”. In this post we set out a summary of the FCA’s plans across these two documents for improving competition in financial markets.
Promoting competition and positive change
The FCA notes that it plans to achieve this in three ways:
- preparing financial services for the future in the context of the proposed Future Regulatory Framework (FRF) which transfers EU legislation into UK FCA rules, adapted specifically for UK markets.
- strengthening the UK’s position in global wholesale markets to ensure it remains open, attractive, encouraging of innovation e.g. its regulatory sandbox, whilst also ensuring rules are appropriate and proportionate.
- shaping digital markets to achieve good outcomes, by
- Working with relevant stakeholders on the broader digital markets regime, including firms with Strategic Market Status;
- Looking at the competition issues arising from Big Tech entry into financial services;
- Considering digital consumer journeys and the barriers to making decisions; and
- Collaborating with other regulators in the Digital Regulatory Cooperation Forum (DRCF) on digital markets issues and other online regulatory matters. The DCRF is formed by the Competition and Markets Authority, the Information Commissioner’s Office and Ofcom.
The FCA also noted that it planned to begin a programme of market studies on market data, beginning with trade data.
These proposals should also be set against the backdrop of the FCA’s proposed Consumer Duty and general push for consumer-focused reform (see further here) which are is intended to place an obligations on firms and improve consumer outcomes. These intended outcomes include consumers receiving fair price and quality; and receiving appropriate information to make decisions about suitable products and services.
Fair pricing and information remedies also often feature as part of the FCA’s competition-focused market studies and investigations (for example, the FCA’s general insurance pricing practices market study report which concluded some consumers were “not getting fair value”). Indeed, the FCA notes in its Strategy “…[f]irms should compete for customers on the basis of service, quality, price and innovation competition should encourage better outcomes for consumers”.
[f]irms should compete for customers on the basis of service, quality, price and innovation competition should encourage better outcomes for consumers