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Aifa calls for reduction in costs to execute PBR

Aifa says the FSA must be held accountable for the massive cost that the introduction of principles-based regulation will impose on the industry.

Speaking at a Treating Customers Fairly conference in London, sponsored by Prudential, Aifa deputy director general Fay Goddard said: “This is costing the industry millions. We are very much about accountability. As lighter-touch regulation comes in, we expect to see reduced staff and reduced costs at the FSA.”

But the FSA says any changes that are made to the rulebook due to PBR will go through the usual cost benefit analysis and will need to be passed.

Goddard also called for the FSA to define the role of trade bodies under PBR. She warned the regulator not to let Aifa and other trade associations become a second tier of regulation. “Is the role of trade association going to become one of guidance? We cannot let a trade body become a second tier regulator or a pseudo regulator. These are big changes and we are all in for a rough ride initially,” said Goddard.

FSA spokesman Robin Gordon Walker says: “We will be releasing a discussion paper in November to clarify the issues about the role of industry bodies within the wider MBPR context.”

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