23 February 2005


In the FSA's press release of 2 February announcing the terms of reference of the review, we stated that the review will draw upon expertise within the financial services sector.

Since then, we have received many expressions of interest from practitioners who wish to contribute. We regard it as a very positive sign that our stakeholders are keen to supply their views.

We wish to provide as much opportunity as possible, within the timetable to which we are working, for interested parties to contribute to the review. With this in mind, we have established the following opportunities:

  • Written submissions: we would welcome written submissions on the issues relevant to the terms of reference for the review. The terms of reference are reproduced below. The submissions should be sent to: suggestions.enf-review@fsa.gov.uk;

  • Issues paper: the review team will publish in March a short issues paper which will seek views on a number of specific points;

  • Roundtable discussions: there will be a series of discussions to debate matters raised by the responses to the issues paper. We aim to hold these in April.

In view of the tight timetable for completion of the work, the FSA will not be contacting interested parties other than through the channels set out above. Nor will we be able to provide specific or individual responses to any submissions that are sent to us. Any changes to the FSA Handbook that need to be made as a consequence of the review will, of course, be subject to consultation in the normal way.

Note:

 

1. Terms of Reference:

Review of Enforcement Processes - Terms of Reference

 

2 February 2005


To review the use of, approach to and decision making process for supervisory actions and enforcement actions to address breaches of regulatory requirements and, where appropriate, to make recommendations. The review will assess the lessons from the FSA’s experience of the last three years operating under the Financial Services & Markets Act 2000 (FSMA) regime including the comments of the Tribunal in the Legal and General case. It will not explore any options which would require changes to FSMA. The review will consider:

  • the processes followed by supervisors, enforcement staff and decision-makers when considering possible breaches of statutory or regulatory requirements, and the nature and extent of the communications and interactions between them;

  • the role and involvement of senior FSA management throughout these processes;

  • options for making regulatory decisions based on a fair procedure by persons separate from the investigators; and

  • the accountability of decision makers to the FSA Board.

The review will be led by David Strachan (Director of Retail Firms Division and Insurance Sector Leader, FSA). He will report to a sub-committee of the Board comprising Callum McCarthy (Chairman, FSA), John Tiner (Chief Executive, FSA), James Crosby (Chief Executive, HBOS plc), Hugh Stevenson (Chairman, Equitas Ltd) and Clive Wilkinson (Chairman of the Birmingham & Solihull Heartlands NHS Trust), who will make recommendations to the Board. Tim Herrington, who took up his duties as the new Chairman of the FSA Regulatory Decisions Committee on 1 February, is co-opted to the sub-committee. The sub-committee will be advised by Michael Brindle QC and Mr David Pritchard.

The conclusions of the Board will be made public in July and any changes to the FSA’s approach will be subject to consultation, as necessary.

 

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