04/11/03

The Association of British Insurers (ABI) has today expressed its support for the Treasury’s review of the Financial Services and Markets Act 2000 (FSMA) announced by the Financial Secretary Ruth Kelly.

Whilst the ABI recognises that it is not appropriate at present to undertake a review of the legislation, the Government plans to address many issues of concern to the Industry. This may help to enhance the future competitiveness of the UK financial services sector.  The key strands of the review are an assessment of the impact of FSMA on competition; aspects of the relationship between the FSA and the Financial Ombudsman Service; and the boundaries of FSA regulation.

Peter Vipond, Head of Financial Regulation and Taxation at the ABI said:

“The review presents a timely opportunity to consider a whole range of issues that we have taken up previously with the Treasury.  These include the complexity of the FSA Handbook of Rules, streamlining the consultation process and the need to ensure consumers become better-informed and properly advised.  We particularly welcome the intention to put in place robust and transparent processes for ensuring Ombudsman decisions take into account the wider implications for firms of those decisions”.

The Treasury has decided not to include a formal value for money review of the FSA.  They do, however, recognise that this forms an important part of the accountability process and will address it at an appropriate time in the future.

Provided by the ABI