The FSA Business Plan 2010/11 - Will It Make It To The End?

Author:Mr Stuart Hills
Profession:DMH Stallard

Originally published on 10 May 2010

The FSA published its Business Plan for 2010/11 on 17 March, 2010. The old philosophy of the "light-touch" retrospective approach with its focus on systems and controls is discarded in favour of a more proactive outcomes-based approach. This highlights a willingness on the part of the regulatory authorities to intervene earlier than was previously the case. Whether the FSA will ever be able to carry out this plan and what impact the new Financial Services Act will have very much depends on the effect of the general election result. The Conservatives have proposed radical change to the regulatory framework, abolishing the current tripartite system and giving the Bank of England responsibility for maintaining financial stability. The Financial Services Act contains an array of measures born out of discussion and debate arising from the credit crisis and broader powers consistent with its new proactive philosophy. There are provisions that relate to recovery and resolution plans or "living wills", controls over executive remuneration, new FSA powers to suspend firms and individuals from carrying out regulated activities and ever broader information gathering powers. The Act gives the FSA an additional regulatory objective of contributing to the protection and enhancement of the stability of the UK financial system. Together with broader rule making powers the Treasury or the FSA will be able to implement binding rules without further parliamentary approval or scrutiny, the loss of which should, in our view, be considered very carefully. It is a natural response to the near catastrophic failure of the financial system to look hard at deficiencies in the...

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