Financial Services Firms Feel Overburdened By FSA

by Robin Pilgrim, LawAndTax-News.com, London

21 December 2004

According to a survey published by the Financial Services Practitioner Panel last Thursday, around three quarters of the UK's financial services firms believe that they are overburdened by the industry regulator, the Financial Services Authority (FSA).

The poll of 3,117 firms, which was undertaken between June and September of this year, revealed that the high costs associated with regulatory compliance are a key issue for financial services firms, with just one in ten of those questioned feeling that such costs are reasonable.

The Panel's report explained that the industry's smaller participants are the most unhappy with the current state of affairs, announcing that:

"Generally, firms complain about the level of investment required to ensure they are compliant and are concerned that these costs are likely to increase still further in the future. Unsurprisingly, this is particularly keenly felt by smaller firms. It is also felt that these costs will result in reduced consumer choice and have a negative impact on the UK's international competitiveness."

However, the Panel also welcomed improvements made by the FSA over the past year, including reducing the number of consultation papers issued, increasing reliance on market-led solutions, and taking "a more careful and pragmatic approach" to the application of EU directives relevant to the financial services industry.

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