FSA Annual Report 2006/07 - Better Regulation Ltd
FSA Annual Report 2006/07 - Better Regulation Ltd
FSA Annual Report 2006/07 - Better Regulation Ltd
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Section six – Appendices<br />
Appendix 2<br />
105<br />
Appendix 2: Accountability<br />
The <strong>FSA</strong>’s response to the Practitioner,<br />
Smaller Businesses Practitioner and Consumer Panels<br />
Response to the <strong>Annual</strong> <strong>Report</strong> for <strong>2006</strong>/<strong>07</strong><br />
of the Practitioner Panel<br />
Introduction<br />
In its <strong>Annual</strong> <strong>Report</strong> for <strong>2006</strong>/<strong>07</strong> the Panel comments on a range of our<br />
policies, plans and activities. We welcome the Panel’s support for particular<br />
aspects of our work, including more principles-based regulation and financial<br />
capability. In this response we focus on those topics on which the Panel<br />
expresses concerns or criticism.<br />
More principles-based regulation<br />
We welcome the Panel’s support for our move to more principles-based<br />
regulation. We agree that this approach will pose challenges – both for our<br />
people and the industry – and we have been working throughout the year<br />
with our stakeholders to address these. One of our key priorities has been to<br />
articulate clearly what a more principles-based regime means and the actions<br />
needed to get there. As the Panel notes, in April we published a paper to<br />
explore the challenges and opportunities for us as a regulator, the industry<br />
and consumers.<br />
We agree that in a more principles-based environment it will be important<br />
for our people to make judgements about whether a firm meets our<br />
requirements in the outcomes it delivers. One of the ways we are addressing<br />
this is by developing a knowledge management strategy for the efficient and<br />
effective use of the information we hold throughout the organisation. As the<br />
Panel has acknowledged, we are also taking steps to improve the<br />
effectiveness of our people. This includes increasing our spending on training<br />
and development, and continuing to recruit people with direct experience of<br />
the financial services industry.<br />
One way in which we can help firms understand what principles-based<br />
regulation means in practice is to publish examples of practices we do and<br />
do not consider meet our high-level requirements. We recognise that the<br />
status of our materials must be clear. As we have explained, whether we<br />
publish material in our Handbook or as less formal supporting material does<br />
not affect the extent to which a firm can rely on the material. Rather, it is a<br />
factor in our own consideration of how much reliance to place on the<br />
material.