FSA to delete the annual reporting requirement on senior managers
FSA/PN043/2006
3 May 2006
The Financial Services Authority announced today that firms will no longer have to notify the FSA each year of the roles and responsibilities of their FSA-approved senior managers. This move contributes to the commitment made by the FSA to reduce the administrative burden they place on firms and also forms part of its better regulation agenda. Whilst this is a relatively small change, it is estimated that it will save the industry about £2 million a year in administration costs.
The ending of the reporting requirement, agreed by the FSA Board last week, has immediate effect and will save firms from having to collate and report the information this year – until now firms had to report, by 31 July each year, all Approved Persons with a significant management function who were in post at the previous 30 June.
FSA General Counsel Andrew Whittaker said:
"This is a sensible and practical piece of deregulation in the context of our programme to simplify the FSA Handbook and remove unnecessary burdens. It will reduce costs for firms and for the FSA without increasing regulatory risks."
In Consultation Paper 05/10 Reviewing the Handbook published last year, the FSA consulted on a number of changes to the Approved Persons regime including removing the annual reporting requirement for significant management functions (Controlled Functions 16-20). The FSA is still considering the impact that the Markets in Financial Instruments Directive (MiFID) may have on the Approved Persons regime as a whole and will provide feedback on the regime later in the year. The reporting requirement is not dependent on the outcome of MiFID so the FSA has moved to drop it now, ahead of formal feedback, as all respondents on this issue, including large firms and trade associations, were in favour of the change.
CP 05/10 also proposed two other sets of changes - to the Money Laundering and the Training and Competence (T & C) regimes. The FSA confirmed in January in PS06/01 that it will remove the existing detailed rules on anti-money laundering controls in their entirety, replacing them with high-level requirements for firms to have their own risk-based controls on money laundering. The high-level rules were switched on in March. And the FSA confirmed in March in FS 06/1 that its detailed T & C rules will not apply from next year to those individuals in financial firms who deal only with wholesale or non-private customers.
Notes for editors
- Consultation paper 05/10 'Reviewing the Handbook' is available on the FSA website.
- Policy Statement 06/1 'Reviewing our Money Laundering regime: Feedback on Chapter 2 and made text' is available on the FSA website.
- Feedback Statement 06/1 'Reviewing our Training and Competence' regime is available on the FSA website.
- In reviewing the Handbook, the FSA is guided by the following principles:
- focusing on making changes in areas where it can have real impact and only respond to suggestions to make changes to individual Handbook provisions where the benefits are clear;
- taking advantage of opportunities to streamline the Handbook as they arise – for instance, where there is scope to redraft material when implementing a Directive;
- adopting high-level standards where these are more appropriate than detailed rules. Benefits arise from focusing our attention on senior management responsibilities and allowing firms greater flexibility in some areas; and
- ensuring that the FSA does not leave firms without guidance that is useful.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.