FSA has responded to the Joint Committee’s Call for Evidence on the Financial Services Bill (Bill). It generally supports the Bill, but makes specific comment on:

  • Clearing and settlement: It thinks it would be better for the Prudential Regulation Authority (PRA) to be responsible for the prudential oversight of clearing and settlement organisations. But it appreciates this would be difficult to achieve given the amount of current change already under way.
  • Financial Conduct Authority (FCA) objectives: FSA thinks the “efficiency and choice” operational objective does not give enough clarity on what FCA is responsible for.
  • Consent for dual-authorised approved persons: FSA thinks FCA should consent to PRA approval of any person holding a significant influence function in a dual-authorised firm in the same way it would consent to the authorisation of the firm.
  • Misselling: FSA wants to see a clearer mandate for FCA addressing how it can deal with misselling, particularly if it is expected to require higher levels of redress.
  • Publication of notices: FSA thinks there should not be any obligation to consult the subject of a Warning Notice before publishing the notice.
  • Supervision on a “going concern” basis: FSA thinks FCA should practise active supervision on a “going concern” basis for the small number of firms it regulates prudentially whose failure could threaten the integrity of a particular market.
  • Co-ordination: FSA urges Parliament to make sure responsibilities of national and international regulators are at all times clearly set out.
  • Accountability: FSA asks for more guidance on the extent to which regulators can make judgements, while ensuring the right amount of accountability.
  • Reality of the regime: FSA stresses that Parliament must consider whether it is prepared to accept a regime where there is some degree of prudential and conduct failure. If it insists on a zero-failure regime, this will make regulation more interventionist and expensive.

(Source: FSA Comments on FSB)