The FSA has published a speech given by David Kenmir (Managing Director of Regulatory Services, FSA) on 4 October 2007 at the Compliance Institute Summit 2007. In his speech Mr Kenmir discusses the challenges the FSA and the regulated community will face over the next couple of years, with a particular focus on the move to more principles based regulation and the FSA’s retail strategy.
The points he discusses are:
- More principles-based regulation (MPBR). Here Mr Kenmir states that the FSA acknowledges that less detailed rules could increase uncertainty within firms about the FSA’s requirements. Compliance departments will need to make the shift from designing, implementing and monitoring processes that embed detailed regulatory rules, to exercising more judgment about the best way to achieve the outcomes the FSA require. Compliance departments will also need to provide more support to senior management so as to satisfy them that the processes and controls they have in place are suitable for the business and the regulatory outcome.
- The FSA’s retail strategy. Mr Kenmir states that in the FSA’s view the move to more principles based regulation sits well with its consumer protection obligations.Financial Capability and the Thoresen Review. Mr Kenmir states that raising the financial capability of the UK population is central to the FSA’s strategy towards the retail market.
- Retail distribution review. Here Mr Kenmir briefly discusses FSA Discussion Paper 07/1, A Review of Retail Distribution.
- Wholesale strategy. Mr Kenmir states that the FSA’s business unit is about to embark on a new 3 year plan which will shape its approach to regulating the wholesale market. In particular the FSA is to look at the need for greater transparency and freer information flows within this market.
- Regulatory transparency. Mr Kenmir briefly refers to a project in which the FSA is looking at the extent to which it could better achieve its statutory outcomes by disclosing more about what it knows or thinks about individual firms.
View Challenges for the FSA, 4 October 2007