The FSA will ease the cost for brokers of regulation if the results of a new study find the burden to be too high.
Last week, the FSA announced the scope, form and timing of its study of the costs of regulation.
The study will be conducted in partnership with the independent Financial Services Practitioner Panel. It will pay particular attention to the impact of costs on small and wholesale brokers.
The FSA said the study's main purpose would be to provide estimates of how much regulation is costing firms. It would also look at the impact of regulation on firms' operating costs and how far these costs go over that which firms would spend anyway as part of day-to-day operation.
It will identify the extent to which regulation affects the prices that firms charge, and firms' ability to remain innovative and competitive.
FSA director of finance, strategy and risk Kari Hale said: "If the study highlights areas of regulation that are expensive but offer little benefit to firms, consumers or the markets, we will look for ways of easing the burden on firms.
Practitioner panel chairman Jonathan Bloomer said: "This research should provide a reliable and authoritative basis from which to identify areas where these pressures might be relieved.
"It is a crucial piece of work."
The study will published towards the end of 2005.
