FSA Product Intervention

As the UK's Financial Services Authority (FSA) itself would agree, its January 2011 Discussion Paper¹ on product intervention signals a sea-change in the way retail financial products will be regulated in the UK. The proposed new approach outlined in the Discussion Paper involves the FSA (and, in the future, the yet-to-be created Financial Conduct Authority (FCA)) having the ability to intervene at a much earlier stage in the process of designing, creating and selling a financial product, rather than concentrating only on point-of-sale processes and disclosure.

The FSA considers that its existing regulatory approach has not always achieved the right customer outcomes and that in some cases consumers have suffered losses due to breaches of the FSA's Principles for Businesses and other rules. In the Discussion Paper, the FSA highlights three high-profile examples of where it considers the current regulatory approach has failed to adequately protect consumers in the UK