ABI issues warning over FSA reform

The ABI has warned that government plans to scrap the FSA and overhaul financial services regulation could undermine the delivery of Solvency II.

Commenting on the Treasury financial services regulation consultation paper published today, ABI director of financial regulation and taxation Peter Vipond said: “There is a danger that changing the structure will impact on current regulatory initiatives. This needs careful management, in light of projects such as Solvency II and the Retail Distribution Review, so consumers and businesses do not suffer. “

He also called for the government to bind the new Prudential Regulation Authority (PRA) into consultation with industry before it changes its rules.

He said: “The proposed new PRA must have a statutory commitment to consult with industry before the introduction of any new rules. It is a strength of the UK that industry currently has input on regulatory changes an early stage. This must be continued in the new system, whatever final shape it takes. Regulators have to be accountable to the industry for the rules they implement and the decisions they make.”

“With so many changes outlined today, more effort will be needed to ensure the new regulatory authorities will be truly joined-up, with no overlaps or underlaps. This will benefit all.”