Firms have told the Financial Conduct Authority they would like to see more focus on competition, clearer regulation and better communication.
The FCA Practitioner Panel surveyed almost 1,500 firms with 83 per cent of responses coming from the chief executive or managing director.
The survey was conducted in February and March and provides valuable information for how the FCA can improve on the Financial Services Authority.
The report named four key points it wanted the FCA to focus on. These were that firms are changing in response to regulation; competition needs more emphasis; communication with firms is crucial and firms want clearer and more predictable regulation.
Over 80 per cent of firms wanted clearer regulation and clearer messages from the regulator over how it wants firms to behave. They also wanted more communication and engagement with smaller firms.
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Some 70 per cent of firms were confident about the FCA's ability to secure a degree of consumer protection but just 28 per cent felt it would promote effective competition. As a result, 20 per cent of smaller firms said they were withdrawing from certain sectors due to regulation.
Firms also felt the FCA should avoid overreacting to potential problems as this could undermine industry and consumer confidence. They also wanted recognition of the regulatory changes they had already made, over 80 per cent said they had amended their risk assessment processes recently.
Graham Beale, chairman of the panel, said: "With the FCA only a month old, these survey results provide important feedback on the expectations of firms for the new regulator. The FCA needs to do more to allow competition to work in everyone's best interests. It must improve the communications with industry so they better understand what is required. It should also be proportionate and predictable in its approach.
"If the FCA gets this right, there will be benefits for consumers and the economy as a whole, as well as for the financial services industry."

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