FSA discussion paper on product intervention

Abstract

PurposeThe 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/approachThe 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.FindingsThe 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/valueThe paper provides practical insight from experienced financial services lawyers.