The Financial Services Authority (FSA) has revealed that it wants to cut its "conduct of business" rulebook, which covers the advertising and marketing of financial products, and the provision of information and advice to clients, from 700 pages to 370. The news is welcomed, but somehow it has taken the FSA more than five years from its establishment to produce a first proposal for reform.
The costly and prescriptive regulation has had a damaging effect on the financial services industry and it is likely that this will stay so for some years to come. It will take at least a couple of years to implement the new proposals and it is not yet clear if they will actually improve the current situation. The FSA announced it wants to move towards principles-based framework but this could easily leave room for different interpretations and to more confusion as to what and to what extent needs to be applied to individual businesses.
Also, the mammoth Companies Bill will add more burden to businesses and in the end most companies will not be better off even if the FSA would cut the rulebook 7-fold.
Comments
Testing the Commentrss
Here goes - I've deleted the site overall from my aggregator and will subscribe just to this one - then someone reply please!
Mark
The reply
Hi Mark,
Here it is!
Nick
Thanks Nick
My aggregator only checks every hour, so I will have to wait to see it picking it up.
Btw, when I try to tab from the subject to the comment box, the cursor tries to move through the options at the top of the box, rather than going straight to the empty box. I can obviously get there with the mouse, but I tend to use tab as a shortcut a lot and it strikes me as highly irritating. Maybe that's just me, and no real big deal!
Thanks
Mark
Caveat emptor
So, in trying to protect the customers of financial service providers, the FSA so burdened the industry with regulation that they were unable to provide what the customers wanted, nor to do so at the best price. The supposed winners from the old policy (the customers) were really the losers, because the government thought it was better for some things not to be available at all than that people have the freedom of choice if there was a chance that they might make a bad choice.
This is the classic price of regulation. Of course, the reciprocal price of deregulation (if the FSA actually implements what it says it "wants" to do) is increased vigilance on the part of customers. Caveat emptor might be making a comeback, not before time.
But before we get too excited, see the earlier post on Gordon Brown's responsibility for the increase in red tape and the likelihood that promises of deregulation will turn into reality.