FSA discussion paper on product intervention

Abstract

Purpose

The aim of this paper is to discuss the implications of the UK Financial Services Authority (FSA) January 25, 2011 discussion paper, DP11/1 Product Intervention.

Design/methodology/approach

The paper discusses the FSA's previous regulatory approach; the limited usefulness of disclosure in consumer protection; the impact of trends toward a direct adviser fee structure and the phasing out of commission‐based remuneration; the FSA's perceived need to become more directly involved in the product development process; various ways in which the FSA might intervene including product pre‐approval, product banning, and price intervention; and possible limitations on the FSA's power to intervene.

Findings

The key issues raised by the FSA discussion paper are a new interventionist stance taken by the FSA and prospectively by its successor the Financial Conduct Authority (FCA); the increased focus on the product itself (in addition to disclosure and point of sale); and the possible extension in the scope of the FSA's existing powers.

Originality/value

The paper provides practical insight from experienced financial services lawyers.

Citation

Gleeson, S., Bates, C. and Morris, C. (2011), "FSA discussion paper on product intervention", Journal of Investment Compliance, Vol. 12 No. 2, pp. 72-75. https://doi.org/10.1108/15285811111142928