FINANCE products could be pulled off the shelf if the new City watchdog believes there is a risk of them being sold to the wrong customer, the Financial Services Authority (FSA) said yesterday.
The new Financial Conduct Authority (FCA), one of the two bodies replacing the FSA next month, will have the power to ban suspect products for up to 12 months while it assesses their suitability.
A ban could be put in place “where a product is in serious danger of being sold to the wrong customers, for instance where complex or niche products are sold to the mass market; where a non-essential feature of a product seems to be causing serious problems for consumers; and where a product is inherently flawed,” the regulator said.
“We know that some in the industry are concerned about us using this power too hastily; I want to be clear that we know proportionate judgement is needed, and that is what we will exercise,” said FCA chief Martin Wheatley. “I do not expect us to use this power frequently, but both industry and consumers need to be clear that we will not hesitate to use these powers where we have serious concerns.”