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This article examines the Financial Services Authority FSA's ‘Treating Customers Fairly’ (TCF) initiative as a case study of a regulatory strategy that aims to stimulate the self‐regulatory capacity of the regulated population to advance socially desirable goals – in this particular case, fair treatment for customers. It considers the development and nature of TCF and notes some difficulties that jeopardize its overall effectiveness. Parts one and two of the article consider the development and nature of TCF, while part three examines its appeal. Part four provides an overview of some problematic aspects of the FSA's initiative. The conclusion draws together the main threads of the analysis and considers the future of TCF and, more generally, consumer protection in the United Kingdom's system of financial regulation. The aim is to make a modest contribution to the debate about the proper direction of the present reform of financial regulation.

The function and effectiveness of legal rules as instruments of social organisation have become an important focus of attention for those interested in financial architecture. This paper offers a critical overview of the policy of rule use of the Financial Services Authority (FSA) in the UK and considers the background of this policy, its nature and some problems pertaining to its implementation. The aim is twofold: first, to describe how current policy trends interact with and shape the FSA's policy of rule use and, secondly, to assess the impact of these trends on the effectiveness of this policy. Special attention will be given to developments such as the policy of making more intensive use of rules termed in a high level of abstractness and generality, the fostering of a discursive and participatory character of regulation, the shift towards meta‐regulation and the adoption of a risk‐based approach to regulation.

PurposeThis paper is concerned with the application of economic analysis to law and public policy. Its aim is not to highlight the well‐documented merits of economic analysis but to shed light on some of its flaws and to propose an agenda for future research in the field.Design/methodology/approachThe paper takes as a case study the debate over the economic rationale for investor protection regulation.FindingsThe paper discusses the main economic arguments for and against regulation and explains why arguments of this type are weaker than commonly thought.Originality/valueThe paper reviews the main arguments for and against the economic rationale for investor protection regulation and identifies the economic reasoning entrenched in the arguments of both sides of the debate, spells out its shortcomings and proposes an agenda for future research.

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