FSA publishes its plans for 2011/12

The Financial Services Authority (FSA) has published its business plan setting out its priorities for 2011/12. In it   the FSAoutlines its priorities and specific initiatives for the year ahead, which reflect the continuing challenges facing the financial services industry.

This year’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 will include:

• Maintaining ongoing supervision in a period of continued fragility in markets
• 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.

Reflecting the extensive resources needed for the regulatory reform program and the need to recognize the difficult economic circumstances for many firms, the FSA is not planning any new discretionary initiatives and is capping headcount at the current level.

The majority of the FSA’s resources are utilized providing ongoing supervision. The two biggest policy initiatives are Solvency II and influencing the substantial international prudential reform agenda, especially in respect of Basel III.