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LONDON, Nov 13 (Reuters) - Britain's financial watchdog has
ditched plans to increase competition in the investment platform
market and for a single interest rate on cash savings, saying it
wants to focus on dealing with the pandemic.
The Financial Conduct Authority (FCA) had set out proposals
to improve competition in the cash savings market by introducing
a "single easy access rate".
"Given the continuing impact of coronavirus and the
low-interest rate environment, we have decided to stop this
work," the FCA said in a statement.
The Bank of England has slashed its benchmark interest rate
to 0.1%, with markets pricing in a move to negative interest
rates. The gap between rates paid to new and longstanding
customers has fallen, the FCA said.
Last year the FCA proposed a package of measures aimed at
improving competition in the investment platforms market,
including restricting the use of exit fees.
The watchdog had said it would give platforms time to make
changes or it would consider further measures, including a ban
on exit fees levied on customers that switch to another
platform.
Two major platforms have now said they would no longer
charge them.
"We have therefore decided to stop the exit fees work but
will be closely monitoring the situation, with the potential to
consult on new rules if market changes lead to harm re-emerging
in this area," it said.
The FCA is also delaying until next year a public
consultation on potential changes to the "duty of care"
financial firms have to their customers.
"These changes will allow us to focus our resources on the
most urgent work where we can make the most immediate difference
to consumers and markets," the FCA said.
(Reporting by Huw Jones; Editing by Kirsten Donovan)
