Key points to be considered are the processes followed by supervisors, enforcement staff and decision-makers when considering possible breaches of statutory or regulatory requirements and the nature and extent of communications and interactions between them.
Other areas under consideration are the role and involvement of senior FSA management throughout these processes; the options for a fair procedure under which people make regulatory decisions separate from the investigators; and the accountability of decision makers to the FSA board.
The review will aim to draw upon expertise within the financial services sector and will not explore options that would require changes to the Financial Services and Markets Act 2000.
Tiner said: “After three years of operating the existing arrangements for investigations and making enforcement decisions and in light of the recent Legal & General case a review of their effectiveness is timely.
“Work begins next week and we plan to announce the outcome in mid-July.” Chris Cummings, director of AMI, urged the regulator to separate the roles of those who investigate firms and those who make the final judgement. “You can’t have one person as judge, jury and executioner,” he said. Cummings also emphasised the importance of maintaining the annonymity of firms when under investigations.
John Ellis, public affairs director at the Personal Finance Society, agreed with Cummings. He said: “There is clearly a need to make the system more robust. This review is all about reputational risk”
