Sifa has flagged up a potential conflict of interest in the FSA’s proposal to devolve the responsibility for ensuring member compliance to professional bodies.
The representative body for solicitor IFAs says the proposal, put forward in the latest retail distribution review consultation paper, “would confuse regulatory and representative functions”. It met with FSA officials this week to highlight this “essential flaw”.
Sifa’s newsletter, Cockerill’s Law, states: “The new IFA bodies would be required to act as frontline gatekeepers and to report any transgressions on the part of their members to the FSA. They would be acting in a regulatory capacity and compromising their duty to their members. Equally, their dual representative and regulatory role would compromise their abil-ity to act in the public interest.
“In Sifa’s view, professional standards are part and parcel of the regulatory function and the FSA already has a powerful tool for standards in the form of treating customers fairly.”