The Financial Services Authority (FSA) has been praised for the rigorous test it is applying to new regulation. The Cabinet Office is overseeing a move across Government to make regulation less burdensome, and its Minister Mo Mowlam has welcomed the authority’s approach to financial regulation.The FSA subjects new regulation to detailed cost/benefit analyses, risk assessments and consideration of the impact on small businesses. The FSA is seeking optimum regulatory efficiency by consolidating and harmonising the rules of the previous regulators which the FSA will replace.
The special attention given to smaller businesses is because regulation tends to have a proportionately larger impact. A small business panel ensures good two-way communication between the smaller financial institutions and the FSA. The FSA is also offering small businesses, like Independent Financial Advisers, a more flexible Training and Competence regime. This less prescriptive approach will allow smaller firms more scope to decide how they will meet the appropriate standards of competence in the financial services industry.
The FSA was formally launched in October 1997 and will fully gain its powers to regulate the financial services industry under the Financial Services and Markets Act June 2000