EU broker legislation will be examined to check whether FSA has over-implemented it

The 'gold plating' of EU broker regulation by the FSA will be examined in an independent review.

The review, set up by the government, will look at whether EU legislation has been 'over implemented' in the UK, leading to excessive red tape for businesses.

The move, which was welcomed by Biba and the ABI, follows the government's pre-Budget report announcement of its intention to reduce unnecessary regulatory burdens on business.

Neil Davidson QC, the former Solicitor General for Scotland, has been appointed by the Chancellor to lead the review.

He is now calling for businesses to come forward with instances where gold plating may be over-burdening business.

Davidson said: "The review will examine where the UK has regulations that are stricter or more burdensome than required by the current EU legislation."

He added that proposals for "simplification" of the rules would be made "wherever possible".

ABI head of market regulation, Chris Hannant, said gold plating had brought about "some slightly odd things".

He added: "Getting implementation right is important. We will be putting a response together."

Biba regulation and compliance manager Steve White said that in the main, the results of the FSA's gold plating were "positive" and "logical".

But he questioned whether it was appropriate for broker to be "shoe horned" into the same regulatory regime as higher risk product providers.

The review will publish a final report with recommendations by the end of the year.

Submissions must be made by 25 May.

'Gold plating' by the FSA

  • The Insurance Mediation Directive's requirements were extended to include not just brokers but also insurers selling direct.
  • The FSA is now looking at reducing insurers' status disclosure requirements, a move which is supported by the ABI but opposed by Biba.

  • The Distance Marketing Directive was extended beyond distance sales. All policy summaries must be in a "durable medium" and bear the key facts logo. Cancellation rights have also been extended.