Changes Proposed For Financial Reporting Council Funding

by Amanda Banks, for LawAndTax-News.com, London

06 February 2008

The UK Government on Wednesday announced that it would like to see new funding arrangements put in place for the Financial Reporting Council (FRC), the UK's independent regulator and standard setter for accounting, auditing and the actuarial profession.

It suggested that a move to largely private sector funding would be consistent with the way the FRC's actuarial work is funded, and with the funding of other similar regulatory bodies, such as the Financial Services Authority and the Pensions Regulator.

Announcing the proposal in a statement to the House of Commons, Gareth Thomas, Parliamentary Under Secretary of State for Trade and Consumer Affairs, stated that:

"The Government believes the Financial Reporting Council has adapted well to its new responsibilities, and in particular welcomes the recent changes it has made to its governance arrangements to increase its effectiveness and efficiency. The Government remains strongly supportive of the FRC."

"Corporate reporting and governance in the UK are widely recognised domestically and internationally as being of a very high standard generally. The FRC's integrated and market-led approach to regulation underpins these standards. This approach continues to receive strong support from companies, investors, the accountancy profession and other stakeholders."

"The Government has therefore concluded that, as a market-led regulator, the FRC should in future be funded largely by market participants."

The FRC will consult market participants on the options for new funding arrangements. In order to allow an orderly transition to stable, new, long-term funding arrangements, the Government has confirmed that it will continue to make a substantial contribution to the FRC's costs for at least the 2008/9 financial year.

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