FSA Tries To Clean Up Its Act
The Financial Services Authority (FSA), stung by recent criticism of its poor litigation record, is now trying to clean up its act.
The FSA has created a new unit to 'stress test' enforcement cases, before they are taken to formal disciplinary review.
The new litigation and legal review unit aims to review the evidence and recommendations that the FSA's enforcement division puts before the Regulatory Decisions Committee (RDC), which makes the FSA's disciplinary decisions.
The change is not receiving unanimous support. One City lawyer warned that the unit could potentially "result in a bottleneck", and drastically slow down the disciplinary process.
The FSA's came under strong criticism during 2005, most notably after the rejection of its endowment misselling case against Legal & General by the Financial Services and Markets Tribunal.
FSA director of enforcement Margaret Cole said it was hoped that the new unit would result in more successful rulings before the RDC, by ensuring that cases were "effectively stress-tested before going before the RDC".
We shall see.
The most effective change that the FSA should make, would be to compel the life assurance companies to underwrite their useless and underperforming endowment policies.