Concerns are growing that the new Consumer Protection and Markets Authority will not have an independent appeals committee.
The FSA has a regulatory decisions committee, which hears appeals against enforcement and authorisation issues and supervisory decisions. The committee is made up of external committee members from the industry who report to the FSA board.
Aifa says it is concerned that the RDC may be replaced by an appeal committee made up of CPMA executives.
Policy director Andrew Strange (pictured) says this is a “significant issue” for Aifa.
He says: “Having checks and balances within regulatory bodies is crucial for any revised architecture. There must be an appeal mechanism that is impartial rather than relying on the executive to act as judge, jury and executioner.”
In its response to the Treasury’s consultation paper on financial regulation, the Financial Services Consumer Panel says: “The Treasury document is silent on the continuation of the regulatory decisions committee of the FSA, which provides a vital proportional and independent check and balance on the enforcement process.
“This structure is crucial as it allows for due process and thus enables the greater transparency in disclosing enforcement information which would empower consumers.”
Earlier this month, Money Marketing revealed the RDC recently overturned an FSA decision to deny reauthorisation to a former Park Row adviser.
A Treasury spokeswoman says: “There will be a further consultation in early 2011, which will include detailed policy and legislative proposals.”