By Dan Ilett, 5 December 2005 13:25
NEWS
The UK Financial Services Authority (FSA) has said it will only implement the minimum requirements for European compliance regulations.
Earlier this year the FSA criticised the European Union for failing to provide a cost-benefit analysis for the Markets in Financial Instruments Directive (MiFID), a regulation that will allow financial institutions to establish branches in other European states. Analysts claim it would cost firms $1bn in IT restructuring.
The FSA has now hinted it will do only what it must to comply with EU requirements.
A statement from the organisation said: "[T]he FSA is committed to implementing directives in a sensible and proportionate way. It is obliged to implement the minimum requirements, even if these would fail a cost-benefit analysis from the UK's viewpoint, but it will not 'gold-plate' EU requirements. It will add requirements only when they are justified in their own right."
Last week the FSA launched a plan to reduce the burden and cost of compliance on companies. In it, the regulator proposed more than 30 changes to regulations, including simpler and briefer rules, removing barriers to financial advice, lifting audit requirements for smaller firms and cutting bureaucracy.
The government watchdog said it is looking to "move the balance of financial services regulation towards high-level principles rather than detailed rules and guidance".
John Tiner, CEO for the FSA, said in a statement: "A shift towards a more principles-based approach will take time to implement, as much care will be needed to ensure that we retain rules that clearly add value in maintaining efficient orderly and fair markets or helping consumers secure a fair deal. Ultimately, though, this approach will produce better outcomes for both consumers and the financial services industry."
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