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Concern CPMA will lack independent appeal process

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.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. Did you really expect the current bunch of unaccountable assholes to allow any sort of supervision of their inept, ill-informed and probably illegal regime to be in place when it phoenixs under a different name?

  2. Bit like having Pol Pot running any appeal commitee.

  3. So yet again we see regulatory policy being driven by the Treasury, despite the FSA’s claim to be entirely independent of government. For how long is the FSA going to keep peddling this mendacious fiction?

    As for “further consultation”, the same old question arises as to whether or not any notice will be taken of any comments submitted by those affected. As likely as not, the FSA/CPMA will declare that they “are unconvinced of any likely benefit to consumers” of allowing the appeals process to pertain, just as they did on the issue of restoring the protection of the 15 year longstop in respect of complaints. By that logic, the FSA can confiscate from advisers just about any reasonable protection you can think of. Whatever happened to the precepts of fair and proportionate regulation as espoused in the Statutory Code of Practice For Regulators? As usual, just ignored. The FSA might as well declare that it sees no likely benefit to consumers of allowing advisers any rights whatsoever.

    And what will AIFA do about it anyway? Talk is cheap.

  4. Scott Taylor-Barr 25th November 2010 at 10:16 am

    Any organisation with the powers of the FSA and soon to be CPMA; i.e. the ability to end someones career and stop them from earning a living, should always have an independent appeal process. The lack of one, or even thinking of setting up the CPMA without this on the agenda, is a very scary proposition indeed.

  5. Alternatively they could simply remove the statutory protection and allow the FSA/CPMA to be subject to the rule of law.

  6. A worthy aspiration, Tom Scott, but only likely to succeed with a significant groundswell of parliamentary support.

    Also required is a much strengthened appeals committee, along with a ban on the FSA using industry funds to fight legal challenges, otherwise we’ll continue to bear both sides’ costs every time, win or lose. Quite where the FSA will get the money from otherwise, I’m not sure, but it cannot be right for us to pay however much the FSA feels like blowing on the costliest lawyers available, every time. The FSCS has done just the same thing in defending the current JR against it in respect of the KeyData injustice.

    As things presently stand, everything is continuing to be manipulated in favour of the FSA and against the adviser community.

    Report this to your MP.

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