The Panel’s 2003/2004 report highlighted a number of significant issues of importance and anxiety for smaller firms. It included thoughts about the number of ongoing reviews and regulatory initiatives and the burdens created. The Panel believed smaller firms needed a period of
relative stability.
Despite ongoing pressure from the industry and the Panel itself, it reported disappointment that many of its concerns have failed to diminished significantly during the course of the past 12 months.
The Panel said continuing issues for smaller firms include: the costs of compliance; the pace, complexity and burden of change; the disproportionate and/or disadvantageous impact of regulation (both in respect of individual initiatives and cumulatively); the need for the FSA to apply and enforce regulation in a risk-based way and with suitable pragmatism; the usability of the FSA Handbook of rules and guidance; the helpfulness, reliability and timeliness of individual guidance; and the development of subsequent implementation of EU legislation.
Ruthvan Gemmell, chairman of the FSA Small Business Practitioner Panel, said: “Smaller firms are struggling to cope with the costs and the volumes of paperwork by the FSA. The regulator has acknowledged that more needs to be done and hopefully the report will aid this process.”
Callum McCarthy, chairman of the FSA, said: “More than 90 per cent of all firms now regulated by the FSA are categorised by us as small firms and this change in the demographics and the need to be sensitive to the particular needs of such firms has required fundamental changes in our processes and approaches. I believe we are responding well to these challenges and will endeavour to do so further.”
