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FSA/PN/066/2007
22 May 2007

The Financial Services Authority (FSA) today dismissed the 'folklore' that small retail firms are under the regulatory radar.

Speaking at a conference for financial advisers, Stephen Bland, Director of Small Firms, warned that a misconception that small retail firms could escape the FSA's attention was wrong and risked tarnishing the industry. The FSA's risk-based approach to regulation enables it to supervise a large number of small firms effectively and assists the regulator to take appropriate action against firms who pose a significant risk to consumers.

Stephen Bland said:

"We are sending a very clear message that small retail firms are not under the radar. Our regulatory approach is based on giving help to firms who run their businesses while Treating Customers Fairly and endeavouring to do the right thing - but coming down hard on those who don't.

"Our focus is on changing firms' behaviour to benefit consumers. We identify and prioritise risks, take action to mitigate those risks by taking specific action against individual firms. We also conduct industry-wide sampling exercises to look at specific issues which enables us to communicate the results to benefit the market as a whole. Firms that are not trying to comply with our requirements should be aware that they could be visited at any time."

The FSA uses regulatory returns, information from other sources and the results of firm-specific, supervisory and thematic work to maintain an accurate and up to date picture of small retail firms, and this allows it to target resources most efficiently.

Notes to editors

1. Stephen Bland's speech is available on the FSA website. Stephen was speaking at Financial Adviser Expo on Tuesday 22 May.
2. 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.
3. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.