In its study, the FSA defined industry guidance as ‘information created, developed and freely issued by a person or body, other than the FSA, which is intended to provide guidance from the body concerned to the industry about the provisions of its handbook.’
However, AMI has questioned the guidance, and suggested that industry guidance could undermine the move towards a principles-based regime. It also suggested that there were considerable risks associated with industry guidance proposals, for consumers, firms and the regulator.
Rob Griffiths, associate director at AMI, said: “AMI feels that regulatory guidance is best produced by the regulator. It has the necessary resources, impartiality and confidence of the industry to deliver guidance and we feel it should continue with a focus on communications such as its ‘Key Rules’.
“Our members have expressed concern at how ‘FSA confirmation’ of guidance could change the relationship between AMI and the regulator. We also see little value in the industry producing guidance which is then ‘confirmed’ by the FSA, yet has no official status and cannot realistically be relied upon as a ‘sturdy breakwater.”
David Hollingworth, mortgage specialist at London & Country, said: “The FSA should be the one making the rules. If there’s a difference in opinion between bodies and guidance then brokers could decide which best suits them for each case.”
