Financial Services Authority sets out its priorities for 2004/05
The Plan sets out the FSA's work priorities for the year ahead and shows the budget required to meet them.
It links closely to the Financial Risk Outlook 2004 published last week which describes the wider environment relating to the financial services industry and the risks to the delivery of the FSA's aim of maintaining efficient, orderly and clean markets and helping retail consumers achieve a fair deal.
Against this background, the FSA's work in the year will be devoted to achieving this aim with a strong new emphasis on making the FSA a more effective organisation. Much of the FSA's planned activity remains broadly unaltered from last year; authorising and supervising firms and monitoring market activities are constants in our life and this work absorbs most of the budget.
Maintaining efficient, orderly and clean financial markets: Priorities for the year will include the modernisation of the listing regime and improving accountability and transparency in the fund management market.
Helping retail consumers achieve a fair deal: We will be seeking further progress on raising the level of financial capability and there will be a significant step up in our work on financial promotion and identifying and countering mis-selling.
Making the FSA a more effective organisation: Key projects will improve the way in which the FSA deals with the large number of regulated organisations including the estimated 20,000 new mortgages and general businesses; reviewing our enforcement processes to see whether this can be made more effective and transparent; and making the FSA Handbook more accessible to firms.
The Plan for the first time includes clear and public milestones during the year providing a sound basis against which the FSA can report and be judged in future.
FSA Chief Executive John Tiner said:
"Our Business Plan for 2004/05 represents a clear alignment between our strategic aim to maintain efficient, orderly and clean markets and to help retail consumers achieve a fair deal, our regulatory priorities and the new operating model through which we will deliver these priorities. This will be underpinned by investments in data and knowledge management systems and our people, which will make the FSA a more efficient organisation.
"The new operating model will secure the benefits of integrated regulation through the concentration on wholesale markets, retails markets and regulatory services and will achieve a stronger focus on the particular issues facing the different sectors of the industry through the role of the sector leaders.
"As is to be expected, the Business Plan reveals a concentration on many of the patterns of previous years, but where the emphasis is changing from policy development to implementation. Fundamental to our approach is working with the forces in the market and intervening only when the market solutions are inadequate in the context of our objectives. The 2004/5 financial year will see the introduction of FSA regulation of mortgage business and general insurance brokers. This will more than double the number of firms the FSA regulates and a smooth and effective transition to statutory regulation for these areas is an important priority for us."
Financial resources
The Budget for the FSA's mainstream regulatory activities (the ‘control total’) in 2004/05 is £201.6 million which is 2.2% higher than for 2003/04.
FSA Chief Operating Officer, Paul Boyle said:
"This budget means that in the first three full years since the FSA assumed its full powers its costs will have increased by no more than inflation. We expect that fees for 2004/05 will increase by an average of only 1.5%"
