Howard Davies outlines FSA strategy for e-regulation

"There is no doubt in my mind that we are in the middle of an explosion of Internet activity. We have to find a way of adapting our regulatory environment to new technology, not adapting the new technology to the old regulatory rules. The Internet helps the regulator, just as it helps the investment firm, bank or share promoter but we will need to have a fully worked-through strategy to exploit it. We now have the outline of such a strategy, which we shall need to debate actively with the industry."

The FSA''s proposed strategy for e-regulation has five components:

Surveillance: obtaining information on Internet based services directly from FSA''s own surveillance staff or from other sources such as the industry, consumer associations, the public, the police or the media.

Education: alerting investors to the upside of Internet investing and the ability it gives them to compare products and services but also emphasising the need for consumers to carry out basic checks on the firms they want to deal with. These basic checks will become cheap and easy in the future using the FSA''s own web site which will be redeveloped to make it more accessible and appealing to the public.

Co-operation: continuing to strengthen mechanisms of co-operation between regulators. The Forum of European Securities Commissions (FESCO) and its enforcement arm, FESCOPOL, have recently been established to improve co-operation between European regulators. On a broader scale, the Financial Stability Forum has been established by the G7 countries to facilitate cross-border co-operation.

Security: ensuring that saving and investing through the web is as secure as other investment routes. Consumers need to feel confident that the protections in place in the rest of the regulatory regime, including the ombudsman and compensation schemes, also apply to the e-regime.

Enforcement: protecting UK investors by taking enforcement action, where appropriate, against those responsible for the content of a website. The FSA has already set out some principles on how it will look at websites and decide whether or not they are contravening regulations.

A copy of the full text will be available on the FSA website from 19:00.

Notes for editors

The fringe meeting, ''ebusiness@labour conference'', has been organised by Swiss Life (UK) plc and Demos. The meeting takes place at the Labour Party conference in Bournemouth and is being shown simultaneously, via satellite, to an invited audience of independent financial advisers in London, as well as being webcast onto the Internet.