FSA Consults On Reforming Approved Persons Regime

by Robin Pilgrim, LawAndTax-News.com, London

04 September 2006

The UK's Financial Services Authority (FSA) on Thursday issued a consultation paper outlining a new proposal to merge the customer functions in the approved persons regime, in response to feedback from the industry.

The FSA revealed that it is especially consulting on:

• Further proposals on merging the customer functions into one generic customer function; and
• The impact of the Markets in Financial Instruments Directive (MiFID) on the Approved Persons regime.

In July 2005, the FSA published an initial paper setting out its proposals to simplify the requirements placed on firms in respect of money laundering, approved persons and training and competence.

It published a Policy Statement in January 2006 regarding its proposals on money laundering and a Feedback Statement (FS06/1)2 on training and competence in March 2006.

The financial services regulator explained that:

"We have been unable previously to issue our feedback for the CP05/10 Approved Persons proposals due to uncertainty on the implications of MiFID. We are now issuing feedback because the text of the Level 2 implementing measures (the implementing Directive) of MiFID has been politically agreed."

"This gives us sufficient certainty to proceed with reforming the Approved Persons regime."

David Kenmir, Managing Director of Regulatory Services at the FSA, added:

"Through our Handbook review programme, the FSA is removing regulations whose costs outweigh the benefits they bring. The proposed merger of customer functions offers a further £1 million annual saving for firms."

Comments are invited by November 9 regarding the proposals contained in Chapter 3 section IV Markets in Financial Instruments Directive (MiFID) – impact and consultation, and by November 23 regarding the proposals in Chapter 3 section III Consultation on merging the customer functions.

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