Regulators always have to be informed about new products coming out, even though pre-approval is not yet a requirement in the UK. Might this not create opportunities for corruption?

At a recent event in the City of London, Compliance Matters asked Tim Dolan, a partner and regulatory expert at the law firm of King & Wood Mallesons, whether an unscrupulous regulator who had privileged knowledge about new products before they came onto the market could make a corrupt fortune by going to the product-providers' competitors and selling them the secrets.

Dolan answered: "The fundamental thing that should be stopping that is s348 Financial Services and Markets Act 2000 that relates to confidential information. The Financial Conduct Authority is very aware that if a person provides them with information that is confidential and is categorised as being confidential, then they are subject to various restrictions on how they can use that. They can disclose it to other regulators in certain requests but they are generally very reluctant to do that because they know the consequences can potentially be quite severe.

"But...care does need to be taken and the timing...I had a chat with somebody from a large payments company who said 'we've got this great product, it's highly price-sensitive and highly innovative, we want to tell the FCA about it but when should we do it?'

"We sort of thought maybe 2 or 3 weeks beforehand [would be a good time]. It's just a matter of getting the timing right. Particularly, you need to be confident in what you're doing and advise that what you're doing is compliant.

"If there's a lot of doubt about it, then that's quite a different discussion but if it's a conversation saying 'we have the following product that we're intending to launch into the UK's retail market in 3 weeks' time or so, please let us know if you have any major concerns,' that sort of conversation is fine. If it's 'well we're thinking about doing it, it's highly risky, it could result in a lot of retail clients losing a lot of money, what do you think, FCA?' Well they are never going to say it's fine, so it's a sort of pointless discussion."

Readers are invited to draw their own conclusions about whether this answer sounds like a yes or a no.