FSA Business Plan 2011/12

The FSA has published its business plan setting out its priorities for 2011/12.

Obviously regulatory reform is uppermost in the plan (section 1 contains further details on what is coming up) which is one reason why the FSA is not planning to embark on any new discretionary issues.

Lord Turner’s foreword advises that in the wholesale markets area there will be no major shifts in philosophy or approach following changes in the regulatory structure; the existing system “is not bust, and does not need fixing”. However there is a reality check in that praise is given to the ‘credible deterrence ‘approach with greater use of the FSA’s civil enforcement and criminal prosecution powers – an approach which will be continued into the FSA’s successor bodies – note below the reference to Margaret Cole.

The reduction of financial crime remains an FSA priority and we are told in section 5 that the regulator will continue to address financial crime systems and controls issues through enforcement activity and increasingly intensive, ongoing supervision. The FSA intends to publish ‘Financial Crime: A Guide for Firms’ this year which will contain examples of good and poor practice to help firms better understand what is expected of them. The last publication of a paper in a similar vein was last year’s ‘The Small Firms Financial Crime Review’ which is still a useful source of reference – Regulatory Roundup 15 contains a link to the latter.

Section 4 warns that the FSA will extend its review of the suitability of wealth management firms’ clients’ portfolios, covering both discretionary and advisory management services. Note also the article on ‘Suitability’ in this Regulatory Roundup.

Appendix 3 contains an organisation chart showing the change in management structure at the FSA being brought in, w.e.f. April, to reflect the new regulatory architecture that is set to become operational at the beginning of 2013 (see past Regulatory Roundups e.g. issue 27 for further details). A footnote advises that Margaret Cole, Director of Enforcement, will assume the interim role of Managing Director of the Conduct Business Unit until Martin Wheatley joins (see Regulatory Roundup 26).

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