On September 4, the UK Financial Services Authority (FSA) issued Policy Statement 07/16 FSA Confirmation of Industry Guidance which introduced a new framework for recognizing industry guidance as part of FSA’s continued steps towards more Principles-Based Regulation.
Any guidance that is created by trade associations, professional bodies or firms can now be submitted to the FSA for formal recognition provided that such guidance conforms with certain criteria. FSA recognized industry guidance will supplement the FSA’s rules and not replace them. There is no obligation on industry bodies to provide guidance and the development of guidance is at their discretion.
The FSA recently confirmed three sets of industry guidance on Outsourcing, Suitability and Appropriateness and Investment Research prepared by the industry group MiFID Connect, which has been preparing guidance on various aspects of the Markets in Financial Instruments Directive (MiFID).
The Policy Statement confirms that the FSA will not take action against a firm which has complied with FSA recognized guidance.