FSA says no to calls for it to pre-approve products

The Financial Services Authority has ruled out introducing product pre-approval as part of its proposed stronger regulatory regime which will see its powers handed over to the new Consumer Protection and Markets Authority.

The FSA's head of consumer affairs Chris Pond told a Social Market Foundation event at the Labour Party conference that prohibitive costs would rule out financial firms being forced to submit new products for approval.

Mr Pond told the meeting: "We have stepped away from the idea of saying we will approve products in advance because we do not have the resources to do that."

The plans had been mooted in a 75-page FSA discussion paper published in January. At that time the regulator said: "We will now intervene earlier in the product value chain, proactively, to anticipate consumer detriment where possible and stop it before it occurs."

However the regulator reported "major implications" for the proposal of having a general requirement for all firms to have their products pre-approved. In particular it mentioned "massive resourcing implications for us requiring additional staff and systems."

It did put forward a case for pre-approving specific products where there are particular concerns. "Where we find recurring problems with a product type or in a specific firm, the benefits of controlling the supply of that product to the market or the actions of that firm may outweigh the costs involved," the FSA said. However, it added that a change in legislation would be needed if it wanted to take the idea forward.

In a response to the discussion paper published in June, the FSA confirmed that approach. It said: "We do not wish to rule [product pre-approval] out completely. If it ever becomes the best solution for a particular issue in the market, we think we should be able to consider it in relation to particular product types, as some respondents have suggested."

Mr Pond's statement to the Labour conference will therefore disappoint interventionists who believe cracking down on risky products before they are brought to market is the only way to safeguard consumers.

But there is some consolation for those demanding tougher action from the FSA. Mr Pond said the regulator is moving ahead with plans to intervene in the manufacture of products to prevent consumer detriment.

Meanwhile FSA non-executive director Brian Pomeroy called on financial firms to develop generic simple products to give consumers a better chance of comparing them.

Mr Pomeroy said consumers found it impossible to compare without generic benchmark products and called for firms to develop an industry-wide standard to promote competition and build consumer trust.

Start your day with The Independent, sign up for daily news emails
News
i100 In this video, the late actor Leonard Nimoy explains how he decided to use the gesture for his character
News
Robert De Niro has walked off the set of Edge of Darkness
news The Godfather Part II actor has an estimated wealth of over $200m
Arts and Entertainment
Fearne Cotton is leaving Radio 1 after a decade
radio The popular DJ is leaving for 'family and new adventures'
Sport
Robbie Savage will not face a driving ban
football
Voices
voices
Life and Style
Nearly half of all young people in middle and high income countries were putting themselves at risk of tinnitus and, in extreme cases, irreversible hearing loss
health Nearly half of all young people in middle and high income countries are at risk of tinnitus
News
It was only when he left his post Tony Blair's director of communications that Alastair Campbell has published books
people The most notorious spin doctor in UK politics has reinvented himself
ebooks
ebooksA special investigation by Andy McSmith
Arts and Entertainment
arts + ents
Life and Style
fashion
Arts and Entertainment
James Franco and Zachary Quinto in ‘I Am Michael’
filmJustin Kelly's latest film tells the story of a man who 'healed' his homosexuality and turned to God
News
i100
Arts and Entertainment
Public Service Broadcasting are going it alone
music
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: HR Benefits Manager

£40000 - £50000 per annum + pro rata: SThree: SThree Group have been well esta...

Recruitment Genius: Office Manager / Financial Services

£30000 - £37000 per annum: Recruitment Genius: Established in 1999, a highly r...

Jemma Gent: Year End Accountant

£250-£300 Day Rate: Jemma Gent: Are you a qualified accountant with strong exp...

Jemma Gent: Management Accountant

£230 - £260 Day Rate: Jemma Gent: Do you want to stamp your footprint in histo...

Day In a Page

HIV pill: Scientists hail discovery of 'game-changer' that cuts the risk of infection among gay men by 86%

Scientists hail daily pill that protects against HIV infection

Breakthrough in battle against global scourge – but will the NHS pay for it?
How we must adjust our lifestyles to nature: Welcome to the 'Anthropocene', the human epoch

Time to play God

Welcome to the 'Anthropocene', the human epoch where we may need to redefine nature itself
MacGyver returns, but with a difference: Handyman hero of classic 1980s TV series to be recast as a woman

MacGyver returns, but with a difference

Handyman hero of classic 1980s TV series to be recast as a woman
Tunnel renaissance: Why cities are hiding roads down in the ground

Tunnel renaissance

Why cities are hiding roads underground
'Backstreet Boys - Show 'Em What You're Made Of': An affectionate look at five middle-aged men

Boys to men

The Backstreet Boys might be middle-aged, married and have dodgy knees, but a heartfelt documentary reveals they’re not going gently into pop’s good night
Crufts 2015: Should foreign dogs be allowed to compete?

Crufts 2015

Should foreign dogs be allowed to compete?
10 best projectors

How to make your home cinema more cinematic: 10 best projectors

Want to recreate the big-screen experience in your sitting room? IndyBest sizes up gadgets to form your film-watching
Manchester City 1 Barcelona 2 player ratings: Luis Suarez? Lionel Messi? Joe Hart? Who was the star man?

Manchester City vs Barcelona player ratings

Luis Suarez? Lionel Messi? Joe Hart? Who was the star man at the Etihad?
Arsenal vs Monaco: Monaco - the making of Gunners' manager Arsene Wenger

Monaco: the making of Wenger

Jack Pitt-Brooke speaks to former players and learns the Frenchman’s man-management has always been one of his best skills
Cricket World Cup 2015: Chris Gayle - the West Indies' enigma lives up to his reputation

Chris Gayle: The West Indies' enigma

Some said the game's eternal rebel was washed up. As ever, he proved he writes the scripts by producing a blistering World Cup innings
In Ukraine a dark world of hybrid warfare and murky loyalties prevails

In Ukraine a dark world of hybrid warfare

This war in the shadows has been going on since the fall of Mr Yanukovych
'Birdman' and 'Bullets Over Broadway': Homage or plagiarism?

Homage or plagiarism?

'Birdman' shares much DNA with Woody Allen's 'Bullets Over Broadway'
Broadchurch ends as damp squib not even David Tennant can revive

A damp squib not even David Tennant can revive

Broadchurch, Series 2 finale, review
A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower: inside the mansion of Germany's 'Bishop of Bling'

Inside the mansion of Germany's 'Bishop of Bling'

A Koi carp breeding pond, wall-mounted iPads and a bathroom with a 'wellness' shower