On May 31, the UK Financial Services Authority (FSA) published a Policy Statement 07/6 that marks a further significant step towards more principles-based regulation. The Policy Statement confirms the approach proposed by the FSA in October 2006 to revise its Conduct of Business rules on the basis of principles and high-level rules, except where detailed provisions are either required by EU directives, or are the only practicable way of achieving consumer protection or other regulatory outcomes.

As a result, the revised Conduct of Business rule book will be half the length of the corresponding current rule book. It will implement the relevant provisions of the EU Markets in Financial Instruments Directive (MiFID) as well as non-MiFID Conduct of Business rules

The Policy Statement also provides feedback on the responses to remaining proposals made in CP 06/19, “Reforming Conduct of Business Regulation”, and CP 06/20, “Financial Promotion and other Communications”. It also confirms, with some amendments, the rules and guidance published in PS 07/2, “Implementing the Markets in Financial Instruments Directive”.