The document outlines the FSA's priorities and specific initiatives for the year ahead, which reflect the continuing challenges facing the financial services industry. The FSA’s business plan has been created against a backdrop of considerable change, with the UK government last year announcing plans for changes to the structure of financial services regulation in the UK. The FSA will restructure into the Prudential Regulation Authority (PRA) and the existing FSA legal entity will become the Financial Conduct Authority (FCA).
This change will occur at the end of 2012 or early 2013. Until then the FSA will continue to deliver on its statutory objectives and implement the major initiatives that are already underway.
The key areas it will concentrate on include:
• Continuing to influence the international and European policy forums, delivering, in particular, the new prudential regulatory agenda.
• Implementing the current EU major policy initiatives, including Solvency II.
• Delivering on the principal national sector initiatives to improve consumer protection: the Retail Distribution Review (RDR) and Mortgage Market Review (MMR).
• Continuing to improve the FSA's operating systems and the quality of its staff.
• Implementing the government's regulatory reform agenda.
Commenting, Hector Sants, FSA chief executive, said: "The 2011/12 business year for the FSA will be a difficult one. We have to ensure that we are operating effectively as a supervisor as well as taking forward the key policy initiatives. The principal ones are progressing the domestic consumer protection strategy, implementing a number of key EU directives and influencing the continuing international regulatory reform agenda.
“The Annual Funding Requirement (AFR) for 2011/12 is £500.5m, up from £454.7m in 2010/11, a gross increase of 10.1% in overall funding. The increase will be borne by larger firms, reflecting the recently increased resources applied to intensive supervision of high impact firms.
“However, the enforcement fines the FSA imposes during the previous year are returned to the industry by way of discounts to their fees in the following year. This means that in total firms will pay 2% less than last year.”
