FSA to carry out less supervision of lower risk small firms
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FSA chief executive Hector Sants says the regulator will spend less time on the routine supervision of smaller firms to concentrate on the transition to the new regulatory structure.
Speaking this morning at the Thomson Reuters offices in Canary Wharf, Sants (pictured) said because the FSA has to both design the new regulatory approach and manage the transition, the regulator’s resources are “undoubtedly stretched”.
He said as the majority of staff’s time is spent on frontline supervision, the regulator needed to reprioritise its efforts to oversee what is a complicated transition process.
Sants said: “We will thus be taking a bottom-up and risk-based approach to scaling back some of our supervisory activities. Nevertheless, although this will be a risk-based approach, we will inevitably be decreasing the amount of time spent on pre-emptive, routine supervision for lower impact firms.”
He added although new risks may be created in the long-term, the move to the Prudential Regulation Authority and the Consumer Protection and Markets Authority meant that change to the regulator’s approach was inevitable.
He said: “There will be some modest diminution in respect of our on the ground inspection of smaller, low impact firms. Inevitably that potentially has an impact in the future on the emergence of new risks in the system. But I think we are trying to do it in as proportionate way as possible.
“We have a high amount of staff, and the reorganisation is a major challenge which clearly needs to be delivered on time in as cost effective a way as possible. Some modest alteration of our risk profile is an inevitable consequence of that programme.”
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Readers' comments (24)
Anonymous | 13 Dec 2010 11:35 am
After the horse has bolted comes to mind!!!!
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GS | 13 Dec 2010 11:39 am
So the FSA has to "design the new regulatory approach". So this new regulatory body is going to be different how?
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Anonymous | 13 Dec 2010 11:40 am
so, spending less time on the comapnies that write 50% of business and only have 2% of the complaints so they can spend more time on the bigger picture........
..........Oh! why had we ifas not suggested this years ago....???!!!!!!
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Simon Webster | 13 Dec 2010 11:40 am
We can see that they are not regulating high risk firms like keydata, they did not regulate the banks and now they are not regulating small firms either.
This merely confirms what many have long suspected - they are doing precisly nothing - merely re-arranging the deck chaires on the Titanic!
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M J Winfield | 13 Dec 2010 11:46 am
Was the FSA not declared 'Brown Bread' by the Government and have many of the good old's not already jumped ship?
Therefore please, tell Mr Sants in order that he does not loss his place in the jumping line.
Optimism, Optimism, where is my optimism
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Richard | 13 Dec 2010 11:46 am
They've spent all our money on Christmas parties instead (M Marketing 9th dec says £1.25m spent on such). Nothing left to do their job............
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Neil F Liversidge | 13 Dec 2010 11:49 am
If you are re-prioritising Hector, can I suggest that you please put an immediate end to the ritual dance of reauthorisation when an adviser leaves one firm to join another? There is no logical reason to assume an adviser's competence needs to be re-proven just because he or she moves jobs. Bin this pointless paperchase and you can reassign staff to more useful tasks as well as enabling advisers to do what they are supposed to do without interruption, i.e. look after their clients.
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Al Lover | 13 Dec 2010 11:51 am
Should be a lot easier for the FSA now, due to thier actions in recent years there are a lot fewer smaller firms to regulate, mine will be one of them, I am sure that when hector wakes up and smells his coffee he will realise he has playes a huge part in ending Financial Advise for the masses, perhaps another part of thier plan?
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Michael Wainwright | 13 Dec 2010 11:53 am
Very sensible of Sants. Why spend money on the firms you are about to put out of business?
The transition will be very complicated after all the name has to be changed on everything.
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Michael Fallas | 13 Dec 2010 11:58 am
But your costs will continue to increase !
Compensation costs will also increase as they fail to regulate with a flawed system !
The cost of advice to consumers will also increase !
15% of experienced advisors are expected to leave the industry !
All this is the great "achievement" of the FSA.
Congratulations all round then and may they all have a great Christmas Party on us to celebrate !
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