Biba chief executive questions level of interest over Threshold Condition 4
Eric Galbraith has criticised the FSA for taking too close an interest in whether brokers have adequate resources.
The Biba chief executive, speaking at the FSA’s insurance sector conference, challenged the regulator over why it was taking such an intense interest in Threshold Condition 4, which says that firms must have adequate resources. He also questioned whether adequacy of resources even needed to be regulated.
Galbraith said that brokers present no systemic risk and that the potential failure of an intermediary does not require high level regulation, given the existence of other regulatory safeguards.
He said that engagement by the regulator in aspects beyond minimum financial requirements is unnecessary, time consuming and expensive.
He also called on the regulator to provide a clearer understanding to smaller firms of what would be suitable assessment.
Galbraith’s comments follow the FSA’s ‘Dear CEO’ letter last month urging brokers to ensure that they are meeting the standards laid out in Threshold Condition 4.
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