Concerns Remain as Final FCA Guidance on Competition Powers Published

    View Authors August 2015

    The FCA has recently released finalised guidance on the way it will enforce its competition law powers.

    On 1 April 2015, the Financial Conduct Authority (FCA) gained concurrent powers to enforce competition law under the Financial Services and Markets Act 2000 (FSMA).

    This means that the FCA has the power to enforce breaches of Part 1 of the Competition Act 1998 and Articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU), and the power to conduct market studies under the Enterprise Act 2002 or refer markets to the Competition and Markets Authority (CMA) for investigations, as far as they relate to the provision of financial services. While financial services have not been defined, the FCA states that it considers it to include “any service of a financial nature such as banking, credit, insurance, personal pensions or investments”. As the FCA itself concedes, this extends beyond the financial services currently regulated by the FCA or other bodies.

    In a speech in November 2014, FCA Director of Competition Deb Jones noted that the FCA’s powers were not changing the law as it applied to financial services businesses. Ms Jones noted that “competition law already applies to all businesses in the UK, including financial services firms, so the main changes…are institutional”. These institutional changes have, however, brought with them a number of concerns for firms trying to ensure compliance with both competition law, and their duties to the regulator.

    Last month (July 2015) the FCA released finalised guidance relating to the way it will enforce its powers and addressing the concerns that had been raised relating to the practical operation of the rules. However, the guidance does not resolve all of the issues, and a number of questions remain outstanding.