MP: Appointed representative approach ‘proportionate’
The UK Government “will continue to work closely with the Financial Conduct Authority (FCA) to ensure that the implementation of the new regulatory framework goes well”, according to John Glen MP.
Responding to a written question from Sir John Hayes MP, Mr Glen, the Conservative member for Salisbury who was involved in introducing FCA regulation in his former role as Economic Secretary to the Treasury, outlined how he considered the FCA’s approach “proportionate” for smaller businesses.
He said: “The legislation allows intermediaries such as funeral directors to become ‘appointed representatives’ of the funeral plan providers whose plans they sell or intermediate. The provider, known as the ‘principal’ firm, would be responsible for ensuring their appointed representatives comply with the relevant rules for selling plans.
“This results in a proportionate approach, whereby smaller firms that operate as intermediaries will be required to follow the rules that protect consumers, without necessarily needing to undergo full FCA authorisation. To support these small firms during the transition period the FCA will reach out to the industry to explain their regulatory standards and expectations regarding the authorisation gateway.
“The FCA is examining feedback concerning competition and smaller plan providers, among other things, as part of its consideration of responses to its consultation. The FCA will consider this feedback in the context of its operational objectives – which include ensuring an appropriate degree of protection for consumers and promoting effective competition in consumers’ interests – as part of its decisions on the regime.
“The FCA’s consultation proposed that funeral plans should be brought within the scope of the Financial Services Compensation Scheme. The Government is currently considering whether further legislation is required to ensure the Compensation Scheme would operate effectively for consumers, if it covered this sector.”
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