Trade associations, professional bodies and firms will be able to seek formal confirmation for the guidance they generate to help their members understand and meet the FSA's regulatory requirements.
FSA director of strategy and risk Verena Ross said: "Trade associations and others have for many years provided guidance on regulatory matters for their members. This new formalised system involving FSA confirmation will contribute towards the move to Principles-Based Regulation, allowing us to focus on the main principles to be achieved. Industry guidance will give firms help and advice on ways of complying with FSA principles and high-level rules, in a way that should not only stimulate flexibility and innovation but also tailor the advice to different sectors."
A policy statement describes the role of industry guidance and the standards that will be applied by the FSA in recognising this. It sets out the process for bodies to follow in seeking FSA confirmation for particular sets of industry guidance and describes the confirmation criteria the FSA has set up to ensure that confirmation requests are dealt with consistently, efficiently and effectively.
The paper makes clear that industry guidance will supplement FSA rules and not replace them and that although the use of industry guidance is encouraged, it is entirely up to industry bodies whether to take forward initiatives of this kind. Furthermore, it is not a move to strip the Handbook of necessary guidance. The FSA will continue to produce guidance where required.
The paper also clarifies that the FSA will not take action against a firm which has complied with recognised guidance covering the issue concerned.
The Policy Statement provides feedback to the FSA Discussion Paper on this issue published last November. Most of the 65 responses supported the FSA's approach to Industry Guidance.
The FSA will review the Industry Guidance process in the first quarter of 2010 as part of a post-implementation review.
