Regulatory update
| Pages | 286-292 |
| DOI | https://doi.org/10.1108/eb024980 |
| Date | 01 March 1998 |
| Published date | 01 March 1998 |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 6 Number 3
Regulatory update
FINANCIAL SERVICES AUTHORITY
Stage 2 of pensions review
On 12th March, 1998 the Financial Services
Authority (FSA) issued Consultation Paper
7 'Pension transfers and opt outs review
phase 2' which addresses the next phase of
the pensions review and redress pro-
gramme begun in 1994. The second phase
of the review will focus on younger inves-
tors — those who are still 15 years away
from retirement. The proposed approach
for phase 2, on which the FSA and PIA are
consulting, is that, with one important
exception, the key stages of the review as
set out in the 1994—95 programme (infor-
mation gathering, loss test, compliance test,
causation test and redress) will remain
unchanged.
The exception is the way in which firms
actively seek out investors in order to
bring appropriate cases within the review
— the process of investor identification.
The proposed new approach to investor
identification has three main elements:
— firms must write to all relevant inves-
tors to inform them about the review
process and about the factors which
characterise their particular category,
and to invite them to put their case
forward for review
— the investors, at the same time as
putting their case forward, should
provide firms with certain information
about themselves which is necessary for
conducting the review of their case
— the FSA will oversee a high profile
publicity campaign with a view to
increasing awareness and understanding
among phase 2 investors both of the
review as a whole and of the potential
implications of any decision on their
part to participate, or not, in the assess-
ment of their own cases.
It is proposed that, as a minimum, there
will be a requirement to make follow-up
contact with all investors who have not
replied to firms. Research and monitoring
arrangements will be established, in coop-
eration with the industry, to assess the level
and quality of investor responses and rea-
sons for non-response. On the basis of this
assessment further follow-up action might
be required on the part of firms (either
generally or for specific firms or categories
of investor) in the interests of investor pro-
tection.
This changed approach takes into
account previous communications between
investors and firms (many will already
have completed an identification question-
naire).
It also seeks to engage investors in
active cooperation with the review and at
the same time overcome the likelihood of
reduced general awareness and understand-
ing of the review process among phase 2
investors compared with investors in the
priority categories.
FSA publishes plan, budget and fees for
1998-99
On 16th February, 1998 the FSA issued
its plan for 1998—99. FSA sees demanding
challenges ahead, as it continues to imple-
ment detailed plans for integrating nine
financial regulators into a single body,
while keeping the total budget of the
FSA and the three self-regulating organi-
sations (SROs) in real terms below the
corresponding figure for the previous
year. The plan includes details of FSA's
progress to date towards creating a single
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