This document is designed to set out how the Financial Conduct Authority (FCA), which is currently expected to be established by end-2012, will approach the delivery of its objectives. The document complements HM Treasury’s February 2011 consultation document: A new approach to financial regulation: building a stronger system and HM Treasury’s June 2011 White Paper: A new approach to financial regulation: the blueprint for reform and the accompanying draft Bill which lays out the proposed legislative framework. Confidence in the financial services sector as a whole is at a low level. Conduct issues since 1990 have been a major factor, particularly the significant instances of widespread selling of financial products to retail consumers. These include personal pensions, mortgage endowment policies, split capital investment trusts and payment protection insurance (PPI). Millions of consumers have suffered detriment on a large-scale and, together, the industry has had to make compensation payments of approximately £15 billion, with most PPI redress still to come. Such outcomes would be regarded as unacceptable in other sectors of the economy. They demonstrate that a new approach to conduct regulation is essential. In response to these events the FSA has already, over the last three years, introduced major changes to its approach. In June 2010 the government announced new regulatory arrangements for the future. These include the creation of the Financial Conduct Authority, which will apply a new approach to consumer protection, building on changes already made but taking them still further. Under the government’s plans, the UK will move to a new model of regulation. The Financial Policy Committee (FPC), within the Bank of England, will be responsible for protecting the stability of the financial system as a whole and macro-prudential regulation. The Prudential Regulation Authority (PRA) will be a subsidiary of the Bank of England, supervising deposit takers, insurers and a small number of significant investment firms.