Regulator hit with strong criticism from practitioner panel
The FSA will examine ways to reduce the regulatory burden of compliance for retail firms after a damning report from its monitoring body, the financial services practitioners panel.
The FSA has long come in for criticism from retail brokers who claim to be left mystified when they contact the FSA's call centre for compliance guidance.
In particular, brokers say, there is a lack of support on the watchdog's Treating Customers Fairly (TCF) principle.
Those concerns were recognised last week when the practitioners panel said "a lot of work still remains to be done" on the TCF initiative by the FSA. It also said further improvements were necessary to the FSA's firms contact centre, the RMAR regulatory reporting framework and its communication and engagement policy for smaller firms.
FSA chief executive John Tiner this week defended a principles-based approach to regulation. He warned that firms would increasingly be given less prescriptive detail about compliance standards.
Firms, he said, "will need increasingly to exercise their own judgments about what business processes will result in a particular outcome".
There will also be research into how the heavy impact of regulation can be reduced.
Tiner said: "We will be looking closely at the feedback from small firms in the report and will seek opportunities to help with the impact of regulation as well as continue to provide dedicated workshops, web tools and roadshows across the UK."
In a bid to push down costs, the regulator plans by the end of 2008 to review activities which produce 80% of administration costs.