FSA will split in April to prepare for 'twin peaks'

The FSA will split internally on 2 April to prepare for the two new financial regulators replacing it, according to chief executive Hector Sants.

The Prudential Regulation Authority and the Financial Conduct Authority will arrive in early 2013.

From April this year all insurers, banks, building societies and large investment firms will have two groups of supervisors, one for prudential and one for conduct.

All other financial firms, including insurance brokers, will have only conduct supervisors.

The split would not be as smooth as expected, Sants said, but added that an early split now would help make the changeover as seamless as possible.

Sants said: “The most important change that will occur at twin peaks, in my judgement, is not the introduction of a new operational framework, but the opportunity to accelerate the process of behavioural change that the FSA embarked on when we began the reform of the supervisory process in the spring of 2008.”