Following the publication of the Prudential Regulation Outlook (PRO) last week, the Financial Services Authority (FSA) has published its business plan setting out its priorities for 2011/12, and the implications for the FSA’s budget.
The document, which outlines the FSA’s initiatives for the year ahead, reflects the continuing challenges that are facing the financial services industry.
The business plan has been launched to a backdrop of the UK government’s announcing plans for changes to the structure of financial services regulation in the UK. The FSA is to restructure into the Prudential Regulation Authority (PRA) and the existing FSA legal entity will become the Financial Conduct Authority (FCA), at the end of 2012 or early 2013.
The FSA said it will continue to maintain ongoing supervision in a period of continued fragility in markets, continuing to influence the international and European policy forums. It will deliver the new prudential regulatory agenda, will focus on implementing EU major policy initiatives, delivering on the principal national sector initiatives to improve consumer protection, and will continue to improve the FSA’s operating systems and quality of its staff. It will also work towards implementing the government’s regulatory reform agenda.
The FSA confirmed that it is not planning any new discretionary initiatives, and is capping headcount at its current level.
It will also continue with its consumer protection strategy, which it launched in March 2010. Through this, it is seeking to actively anticipate consumer detriment, stopping it before it occurs.
“The 2011/12 business year for the FSA will be a difficult one,” admitted Hector Sants, FSA chief executive. “We have to ensure that we are operating effectively as a supervisor as well as taking forward the key policy initiatives. The principal ones are progressing the domestic consumer protection strategy, implementing a number of key EU directives and influencing the continuing international regulatory reform agenda. All this has to be done at the same time as taking forward the preparations for a new regulatory structure. The regulatory reform agenda remains on track to ensure the new structure will be ready in 2012. We will be seeking to deliver this agenda with a capped headcount.”
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