The FSA has announced that it will begin the process of reorganisation to create a new prudential business unit and consumer and markets business unit on 4 April. In a letter to firms FSA Chief Executive, Hector Sants, (who has been appointed by the Treasury as the new Chief Executive of the Prudential Regulation Authority) has described this as “The first step on the road to becoming two separate regulators”. His letter says that, for the moment, integrated supervision of firms will continue, which we assume means that firms do not at the moment need to worry about the possibility of having two ARROWS visits – one to consider their prudential status and a separate one to consider their conduct of business compliance.

We have however learned that the FSA’s usual financial risk outlook, their overview of the key issues facing the industry, is this year to be split into a prudential risk outlook and a conduct risk outlook. We understand one of these will be published at the end of this month and the other in mid-March.

The FSA’s financial and business planning year normally runs from 1 April to 31 March. We wonder whether the decision not to implement their internal reorganisation on the very first day of their new financial year is to avoid the obvious April fool jokes which might have otherwise resulted.