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Lawyers to lobby on principle regulation

A consortium of legal experts led by Beachcroft Wansbroughs is planning to lobby the FSA this autumn over the legality of its principle-based regulation.

Financial services law firm Beachcroft Wansbroughs has invited a team of legal and compliance directors of financial services firms, legal professors, barristers, judges and the FSA general counsel to the board – the regulator’s head lawyer – to attend a summit meeting on October 10 at London’s Atheneaum Club.

The FSA says its general counsel to the board will be unable to attend because of other commitments.

Beachcroft Wansbroughs partner Nigel Frudd is concerned over the legality of principle-based rules like Treating Customers Fairly, saying they could contravene the European Convention of Human Rights.

Frudd argues that principle-based regulation is too vague to be used by a regulator exercising powers which extend to imprisoning individuals found guilty of breaches.

He says: “The wider the net is thrown and the more we rely on principle-based regulation, the more significant are issues of certainty of risk and possibly human rights. Principle-based regulation is new to lawyers. I want to be able to give the right advice to my clients on what the law is and at the moment I cannot do that.”

IFPC planner Peter Cox says: “These are wrong-headed laws that do not represent natural and logical justice. I would hope that this team of lawyers does succeed in its lobbying because it is costing the ind- ustry a lot of money.”

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