Regulation
As the pre-election political campaign takes hold, the Conservative party has announced its plans to introduce a regulatory reauthorisation bill, which means the Financial Services Authority (FSA) could effectively be governed by Parliament, if the Tories seize power
In a recently launched paper, Reform of Regulation Covering the UK Financial Services Industry - Competition and Competitiveness: A New Agenda, Shadow Chancellor, Oliver Letwin, suggested that the FSA rulebook should undergo a fundamental review in order to reduce confusion and improve clarity.
David Severn, director general at the Association of Independent Financial Advisers (AIFA), said the proposals made sense. "The Financial Services Authority's rule book attempts to micro-manage the way firms conduct their business. It adopts a 'one size fits all' approach which does not fit with the many different types of firms in the market and the way they conduct business," he said.
The paper also proposed that the FSA should be obliged to provide a detailed cost benefit analysis on its rules in order to combat costs. Intermediaries' costs should also be cut by slashing the claims period from 10 years to seven and forcing complainants to pay a refundable claims fee. Fines should also be capped at £250,000, it stated.
