Treasury select committee chairman Andrew Tyrie has written to FSA chief executive Hector Sants describing the regulator’s rapid dismissal of the committee’s recommendation to delay the RDR as “unacceptable”.
In the letter, sent yesterday, Tyrie says: “You will be aware that last Thursday the FSA circulated an embargoed response to our RDR report, rejecting in a peremptory manner our recommendation of a one year delay to the RDR’s introduction. This was issued within hours of the embargoed copies of our own report being distributed.
“The committee has discussed this. We deprecate the Authority’s action. It was precipitate, giving the impression that no adequate consideration had been given to the arguments for the delay we recommend. This is unacceptable.”
In this week’s Money Marketing, Treasury select committee members attacked the FSA for showing “arrogance” and “contempt” for the committee in swiftly dismissing its recommendation that the retail distribution review should be delayed.
The TSC’s report on the RDR, published over the weekend, calls for the January 1, 2013 implementation date to be delayed by a year to give advisers more time to meet the QCF level four qualification requirements, alongside a softening of the cliff-edge deadline for experienced advisers.
The FSA released an embargoed response alongside publication of the report which rejected the MPs’ key recommendations and stated it is committed to the January 1, 2013 deadline.
Labour MP George Mudie says: “Accountability is a hot issue at the moment and this is a case in point. We put a considered view to the FSA and, without much thought and with some arrogance, it pre-emptively told us where to go.”
Conservative MP Andrea Leadsom says: “It is astonishing the FSA would rule it out of court when it was a very strong recommendation and pretty disgraceful that it would get its retaliation in before the committee’s paper was officially published.
“It shows real contempt for the considerable work that went into the report and it is a complete two fingers up to the committee.”
Liberal Democrat MP John Thurso says: “Maybe it shows that seeing as the FSA is disappearing it has decided not to bother too much any more.”
Conservative MP Mark Garnier says: “The FSA has had a look at the report, shrugged its shoulders and said it is not going to bother with it and banged out a press release in response without even letting us know first. It is pretty unimpressive.”
Labour MP Andy Love says: “We were trying to find a proper balance between the needs of consumers and the difficulties some IFAs are facing in meeting the requirements. I was surprised at how quickly the statement came out but I would hope they would give some consideration of the points we were trying to make.”
The FSA has yet to respond fully to the report but Cicero Consulting director and chief corporate counsel Iain Anderson says the quick response sends out a deliberate message. He says: “The FSA has tried to kill the TSC’s recommendation dead but I do not think it can. The opposition will pick it up and there have been a lot of Conservative backbenchers interested in this.”
Labour Shadow Treasury financial secretary Chris Leslie says the FSA’s rebuttal of the committee’s recommendation is “unsatisfactory”. He wants the regulator to show there will not be a shortage of advice after the RDR.
He says: “If the regulator does not do that, we will be asking questions of the Treasury to explain what it is doing to counteract that reduction in advisers. It might well be that we look to table debates on it, but even ministers are hamstrung in what they can do to affect regulators.”