FCA’s Mission Statement – A Suggestion

The Financial Conduct Authority (FCA) has been consulting on its “Future Mission” and ShareSoc has submitted a detailed response. It can be read here: http://www.sharesoc.org/FCA-Mission-ShareSoc-Response.pdf and there is also a press release which we issued this morning which summarises it: http://www.sharesoc.org/pr86-fca-mission.html

It’s a pretty devastating critique of the activities of the FCA and the muddled thoughts about its mission statement. It has occurred to me that actually writing a mission statement for the FCA should not be that difficult, so here’s my attempt at it. Note: this is my personal view and is not necessarily formal policy of ShareSoc. 

A Mission Statement for the Financial Conduct Authority

  1. We will ensure that financial markets are fair, honest and orderly (that includes not just stock markets but markets for other financial services such as insurance, pensions, banking services, etc).
  2. We will enforce the law and vigorously pursue those who break laws or regulations. Where infringements are proven we will impose penalties and “name and shame” the malefactors.
  3. We will ensure that information is provided to all market participants equally.
  4. We will ensure that investors have the information to make informed decisions on financial investments and other financial services and that such information is unbiased.
  5. That no distinction will be drawn between the wholesale and retail markets (i.e. that individual investors will not be excluded from wholesale markets or prejudiced in any way).
  6. We will not protect retail investors or consumers of financial services from their own ignorance or foolishness, but we will ensure they have access to free or low cost education and free information about any investments or services they are contemplating including the likely risks and returns to be obtained from them. Such information to be provided should be appropriate to the likely readers.
  7. We will generally deter speculation, the excessive use of gearing, trading on margin and other such financial activities where they serve no purpose other than to promote gambling activity rather than serve the underlying needs of businesses or consumers.
  8. We will ensure that the ownership of investments is legally clear and not obscured by artificial structures such as nominee accounts.
  9. We will only approve the sale of new financial products or services where they meet a genuine need that is not adequately covered at present.

So that’s it on the principle that all good mission statements are short and easily comprehended. What more is needed?

If you think there should be more, please contact me.

Or if you think it should be shorter, one could consider the mission statement of the US Securities and Exchange Commission (SEC) which is: “The mission of the SEC is to protect investors; maintain fair, orderly, and efficient markets; and facilitate capital formation”. An admirable encapsulation, but that only covers stock markets of course.

Roger Lawson

 

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