Product regulation rollercoaster

The FSA is itching to intervene earlier in the product lifecycle, however it may be moving ahead of the mandate from Europe. Jacqui Hatfield reviews the twists and turns of UK product regulation and discusses current dilemmas.

Jacqui Hatfield (jhatfield@reedsmith.com) is a partner and head of the financial services advisory group at law firm Reed Smith.

Prior to the credit crisis, the focus of regulators had been on the sales process and on product disclosure, rather than on the design of products. Those providing advice to retail clients are subject to detailed ‘know your customer’ and suitability rules and there are prescribed requirements for financial promotions. In addition, the FSA’s Treating Customers Fairly (TCF) initiative focused on fair consumer outcomes, particularly in relation to the promotion of products.