FSA explains principles-based regulation

Firms should not fear the Financial Services Authority’s (FSA) shift to more principles-based regulation and should instead look at the benefits that the regime change should bring about, the supervisor said recently. In a new paper describing its shift to more principles-based regulation, the FSA said “we are conscious that it must be possible for a firm to predict at the time of the action whether it would be a breach of a Principle” and referring to industry concern that the regulator will apply hindsight in enforcement issues said: “We do not believe such concerns are justified”.