Those who lost out in the bidding to become the monitor for firms of accountants, lawyers and actuaries offering investment advice have this week expressed disappointment after the FSA said it would keep the job in house to maintain low costs.
The FSA said it would not outsource the work, citing reasons of cost for its unforeseen decision. The FSA put out to tender its new powers to regulate last November accepting eight bids from professional bodies, UK Law Societies, accountancy and law firms.
Commentators now believe the cost concerns may be good news for practitioners who feared higher fees as a result of a new monitor.
Andrew Harding, head of professional standards at the ACCA – which bid on its own and in partnership with PricewaterhouseCoopers – said: ‘If the FSA can do it cheaper than the existing professional bodies that must be comforting to practitioners at small firms who were concerned about the expected level of fees.’
ACCA currently charges a fee of £450. Some reports claimed a new body would charge £1,000.
Stephen Thomas, head of the Joint Monitoring Unit, which also bid for the work, said he was surprise the FSA kept the role in-house.
Although bound by a confidentiality agreement and therefore unable to speak freely on the matter, the mood of most bidders was despondent. A spokesman for the Law Society of England & Wales said: ‘We are disappointed that the Law Society has not retained the right to supervise and monitor firms doing financial services work.’
The FSA said its decision was solely based on cost-effectiveness, despite concerns of conflict of interest arising.
The new financial services regulator which still has not assumed its full powers has undergone a series of setbacks recently and this decision only further highlights the political and commercial wrangles afflicting its establishment. The financial services and markets bill which is currently going through Parliament will eventually endow the FSA with its powers.
The FSA said it was not in a position to comment at present.
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