Financial Conduct Authority chief Nikhil Rathi cuts through red tape

Britain’s financial regulator will today unveil plans to cut red tape in the City, making it much easier for consumers to access investment services.

Plans to break with consumer norms and put new emphasis on performance, such as value for money, are designed to spark a new culture of risk-taking and improve Britain’s competitiveness against rival markets in New York.

The reforms proposed by Financial Services Chief Executive Nikhil Rathi were approved by the Treasury late last week and will be put before the House of Commons today.

Rathi told the Daily Mail that the changes are aimed at ending obstacles that have held back riskier investments in Britain, hampered the London Stock Exchange’s ability to win investor support for initial public offerings and made it harder for UK companies to transact internationally and raise funds on secondary markets.

“There have been a lot of reforms at the FCA,” Rathi said. “I think we’ve really made progress in being different operationally. We’ve changed course significantly in terms of consumer protection with outcomes-based regulation,” he added.

And he believes now is the time to give consumer groups the chance to voice their views on how they feel about easing protections.

Among other things, Rathi has not backed down on his controversial proposal to “name and shame” individuals and companies under regulatory scrutiny. The proposal sparked strong criticism of the FCA when it was unveiled ahead of the election campaign.

The FCA hopes to report on its proposal in the autumn after considering responses from the City, Whitehall and consumers.

‘We are moving towards a more transparency-based system, which will allow investors to decide whether they want to support founders and companies, which is the predominant approach in other markets.

“There will be greater accountability in investor management and engagement with investors and boards,” Rathi said.

The FCA introduced a consumer duty last July, a requirement for companies to be transparent about the potential risks of products on sale.