New body will take over activities undertaken by FSA, Serious Fraud Office and Office of Fair Trading
The coalition government has moved to clip the FSA’s wings by pledging to take away its enforcement powers over white-collar crime.
The government’s full coalition agreement, published last week, promises to create a single agency to tackle serious economic crime.
The new body will bring together enforcement activity work currently carried out by the Serious Fraud Office (SFO), FSA and Office of Fair Trading (OFT).
It will take over responsibility for investigating and prosecuting corporate crime, implementing an element of the more wide-ranging regulatory overhaul planned by the Conservatives when they were in opposition.
The Financial Services Regulation Bill, announced in Tuesday’s Queen’s speech, takes forward another element of the shake-up: the transfer of macro-prudential regulation of financial services to the Bank of England.
But the Tories have been forced by their Liberal Democrat allies to backtrack on wholesale plans to abolish the FSA and create a new Consumer Protection Agency to carry out non-prudential regulatory work.
Public affairs consultancy Lansons’ director, Richard Hobbs, said the creation of a single agency to tackle white-collar crime made sense. “There’s no doubt that there was fragmentation between the SFO, FSA and OFT, so you can see the rationale.”
Last week also saw the final appointment to the new government’s Treasury team, with the announcement that Sir James Sassoon will fill the newly created post of commercial secretary.
Sir James, who will become a peer so that he can take his place in the government, carried out the review of financial services regulation for chancellor George Osborne when the Conservatives were in opposition.
The full coalition agreement also includes the pledge to implement the Conservative manifesto promise to establish a free national financial advice service, which would be fully funded by a new ‘social responsibility levy’ on the financial services sector.
The agreement also pledges to implement the recommendations of the previous government’s Pitt Review of flood management.