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Panel survey reveals fears on rising compliance cost

The increasing cost of compliance is having a negative impact on competition, according to the Financial Services Practitioner Panel.

The panel surveyed 3,000 firms on the FSA’s regulatory performance and found that the cost of compliance is the single biggest issue.

Firms are unhappy with the level of investment required to ensure they are compliant and are concerned that these costs are likely to increase in the future.

The panel points out that this pressure is particularly keenly felt by smaller firms and says the costs are likely to result in reduced consumer choice and have a negative impact on the UK’s international competitiveness.

Its survey also found widespread feeling that the regulator does not give sufficient priority to international issues and that it does not take a lead on matters concerning international regulation.

Overall, satisfaction with the FSA had increased slightly over the last two years, with 22 per cent of firms agreeing that their relationship had improved while 8 per cent thought it had deterioratedPanel chairman Jonathan Bloomer says: “The survey raises a number of issues regarding the industry’s perception of its regulator. While some encouraging signs emerged from its findings, there is clearly still much room for improvement. The panel has identified a number of priorities and the FSA must now reflect on these and decide how it is going to work with the industry to address them.”

FSA chief executive John Tiner says: “As with all such reports, there are some comments with which we agree and others on which we beg to differ but we will work constructively with the industry to examine its concerns.”

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