Attuning regulation to risk: FSA measures its own progress to date

Joanna Gray

Although there may be many an Equitable Life policyholder who will bridle at the title of “Building the New Regulator: a Progress Report I” (December 2000) as well as at its necessarily general tone, this report does provide a valuable follow-up to the January 2000 document “A New Regulator for the New Millennium” which rolled out the risk-related manner in which FSA is to seek to fulfil its objectives under the Financial Services and Markets Act 2000 (FSMA). Amidst the flurry of more immediate activity, preparing for N2 and subsequent transitional periods, compliance staff must also make time to monitor and reflect upon FSA’s development of its new risk-related operating framework. Compliance officers will be concerned about where their institution is to be positioned in that framework in the future and what they need to do to ensure that it is positioned in a way that minimises cost and maximises competitive advantage. Those questions are far from general, abstract ones grounded solely in the realms of regulatory theory. They are highly practical and need to be communicated to and thoroughly understood by senior management.