The UK’s finance regulatory body aims at improving competition by opening the market for new entrants.
ForexMinute.com – UK’s official regulatory authority FCA has today announced to inaugurate a new regulatory body by April 2015, under The Banking Reform Act (2013). The new body will be authoritative to oversee UK payment systems, while monitoring business ethics and safeguarding consumer protection within the finance sector.
According to an official report by FCA, the UK’s payment systems process over 7 billion transactions per annum, worth over £75 trillion. The FCA’s ‘call for inputs’ will help shape the focus of the new regulator’s work.
“This sector is critical to the economy so it must reflect the needs of people and firms and enjoy their confidence,” said FCA Chief Executive Martin Wheatley. “We need to know if the sector is as open as it should be to new entrants into the market and whether consumers are getting the best possible deal.”
The concerns of Mr. Wheatley is very well answered in the objectives of the new regulatory body which, upon coming into effect, will efficiently promote competition within the payment systems segment. The facts suggest that presently, only big banks owns and manages the largest payment systems, which eventually leads to opacity. With increasing competition, the new regulatory body will bring new players – challenger banks – into picture that can efficiently compete with the bigger banks.
The other two objectives, among the total of three, are: Promoting innovative techniques to increase transparency in payment systems, and ensuring that payment systems operate in the interests of their users.
There are a number of payment systems in use in the UK, and HM Treasury will consult on which payment systems will be overseen by the new regulator later this year.
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