PracticeConsultingExperts urge FSA to remember small business

Experts urge FSA to remember small business

The Financial Services Authority has been warned by a panel of independent advisers it will be scrutinised to ensure its future regulatory regime does not become over-burdensome on small businesses.

In its first annual report to the FSA, the small business practitioner panel commended the authority on its intentions but warned it should be watching for evidence that the regulatory regime would not be over-burdensome on small businesses.

‘The critical test of good regulation will be that it is proportional, appropriately differentiated and pro-competitive. One of the panel’s tasks will be to tell the FSA if it strays from this path of good regulation,’ said Roger Sanders, joint chairman of the panel.

The panel, which was established by the FSA after consultation with the industry, welcomed the FSA’s willingness to listen to it on matters relating to the position of small business, and the authority’s approach to proportional regulation. The panel also welcomed most of the policy and consultation work undertaken by the FSA in preparation for the future regulatory regime.

But the 13-member panel said it continued to be concerned that proportional regulation may not work effectively in practice. The FSA’s new regulatory regime will be rolled out after the 2001 implementation of the Financial Services and Markets Bill currently before parliament.

Joint chairman Michael Quicke said: ‘The FSA has a difficult task ahead to ensure that the style and quality of regulation is not dependent on whether you are lucky with your supervisor, but is supported by controls and feedback to ensure that problems can be resolved quickly and easily.’

FSA chairman Howard Davies said: ‘We will pay close attention to their views on how far we succeed.’

The full report can be found on the FSA website

FSA publications

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