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ABI onslaught at FSA enforcement tactics

The ABI has launched a scathing attack on the FSA’s enforcement procedures, slamming it for sub-standard investigation work, bias and lack of transparency.

The FSA is undergoing a review of its enforcement processes and is taking feedback in response to last month’s enforcement process review issues paper.

ABI director of regulation and taxation Peter Vipond accuses the regulator of failing to always “prosecute based on an adequate and thorough investigation” and criticises the regulator for using staff with inadequate knowledge of the industry and using retrospective regulatory standards.

The ABI wants the FSA to improve the quality of its investigations and ensure enforcement staff have the “best possible knowledge of the industry and its issues”. It says the FSA should make more effective use of normal supervision of firms before taking enforcement action.

It urges the FSA to “be fair and seen to be fair” and accuses the regulator of keeping firms under investigation in the dark. It argues that firms being investigated are “entitled to know precisely what evidence has been presented about them to the regulatory decisions committee by FSA officials and given adequate opportunities to respond”.

Vipond says: “FSA enforcement procedures need to command greater confidence within the regulated community. The FSA will need to address specific industry concerns about its tendency to build a general case on the basis of a very small number of cases and its willingness to apply some standards retrospectively.”

FSA spokeswoman Kate Burns says the FSA will publish the findings of the review in June but will not respond to submissions in the interim.


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