UK firms hit out at FSA’s deluge of compliance material
A UK securities and investment industry body has hit out at the deluge of compliance material being hurled at the sector by regulator the Financial Services Authority (FSA), saying it has too much output and that it can conflict with European Commission guidance.
The majority of firms represented by the Chartered Institute for Securities and Investment (CISI) believe the FSA’s work is becoming counterproductive, with the regulator issuing too much material for them to keep up with.
As many as 88% of respondents to a survey by CISI said “the volume of FSA material with which I have to keep up to date is a serious drain on the compliance resource within my firm”. Another 80% said a cut in FSA output would improve compliance.
“While the CISI Compliance PIF understands the FSA needs to react publicly and swiftly to fast-moving events, we feel that the spread of issuance is out of proportion with any perceived problem,” said the body’s Chairman, Julian Sampson.
Between 1 January and 16 March 2011, the FSA issued 111 documents, making up 1,929 pages. Within that, there were 15 different types of document, including formal discussion papers, consultation papers and policy statements, enforcement final notices, and “informal guidance” such as newsletters and speeches.
The FSA has a star rating through which it rates the importance of formal documentation, but that does not apply to other material it sends out, including informal guidance.
But firms feel compelled to read everything they receive, said 69% of respondents to the CISI survey.
In response, the body suggested the FSA’s star rating should be extended to all of its written communications, with 91% of those represented in its survey agreeing.
It said informal guidance should be reduced, including press releases and newsletters.
The FSA was also criticised by the CISI for issuing material on the same subject that the European Commission looks into at any given time, and urged it to reevaluate its timetable.