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Post Magazine - 18th January 2007
FSA Reforms no nearer
Along with many others, I’ve been following the review of the Financial Services Authority’s rules since it was grandly announced in June last year that: “General insurance conduct of business review looks to fewer rules” – you will be forgiven for not noticing much evidence of this so far as the review is not likely to be completed until April this year.
In the meantime, the Davidson Review of the Implementation of EU Legislation was published last November. It runs to 128 pages and, like the regulation it seeks to review, takes a great many words to say very little. Because the review was commissioned by the government, as a pacifier to those who complained that EU directives were being ‘gold-plated’ and ‘over-zealously implemented’, it should be no surprise that “The review found that properly assessing whether a particular piece of European legislation has in fact been over-implemented, and whether that over-implementation is justified, is not straightforward”, and advised that the government use a few more quangos to check they are implementing EU directives appropriately.
The report consist largely of spin and compromise with few ‘action points’; however there is a glimmer of hope, in that, within (another) 18 months the FSA should “reduce and simplify the client money rules” together with a few others. So, just when the industry has finally got to grips with the CASS rules, and will have refined their systems and procedures to cope, they will be changed to make them easier to comply with – or will they? Davidson can only make recommendations, there is no requirement for anyone to adopt them. It seems that those who thought that either the Davidson or DSA reviews would herald the swift abolition of some of the regulator’s more controversial ideas are likely to be disappointed.
As we being 2007 it is good to see that, while margins have shrunk and competition has increased, the FSA’s rulebook unites us. Howe we vulgar proletariat would squabble and bicker if we did not have the guidance of our regulators in Brussels and Canary Wharf to enlighten us – truly, civilisation is a great thing.
Andrew Holman, chief executive, Holman’s
