?The FSA has dismissed criticism from Biba over its new rules for endorsing industry guidance.
Biba criticised the FSA for its requirement that the guidance must be freely available to all and not limited to trade body members.
The ABI also has called for clarification about how the Financial Ombudsman Service will treat approved guidance.
The FSA’s new rules mean that trade associations, professional bodies and firms will be able to seek formal confirmation for the guidance they generate for members to help them understand and meet the FSA’s regulatory requirements.
The FSA will not take action against a firm which has complied with recognised guidance.
The regulator said the move was an important step towards principles-based regulation that would allow for more flexibility in meeting its lengthy regulatory requirements.
But Biba criticised the requirement that the guidance must be freely available to be recognised.
Biba chief executive Eric Galbraith said: “I’m a great supporter of principles-based regulation, but in our submission on this issue we highlighted some areas of concern.
“The FSA says guidance has to be created, developed and freely issued, and our concern is that our guidance is freely available to our members but not to non-members.”
He said it cost Biba money to develop industry guidelines and members paid for that service.
“Why would we make that freely available? We will be discussing this with the FSA.”
An FSA spokesman said the regulator had considered the concerns in the consultation process and would not alter its position.
Meanwhile, the ABI has called for clarification about how the Financial Ombudsman Service will treat approved guidance. It is concerned that insurers could be penalised if they did not follow endorsed procedures.
Chris Hannant, head of financial crime prevention and market regulation for the ABI, said the insurance industry wanted to be able to have freedom about the approach it adopted and not have the guidelines mandated.
“The FSA has recognised that guidance is one way but not the only way, and it’s a matter of whether the ombudsman will agree.”
The ABI plans to meet both the ombudsman and the FSA to talk about its concerns.
FSA director of strategy and risk Verena Ross said the new formalised system would allow for the focus to be on the main principles to be achieved.
She said: “Industry guidance will give firms help and advice on ways of complying with FSA principles and high-level rules in a way that should not only stimulate flexibility and innovation but also tailor the advice to different sectors.”
