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FSA to step up action on small firms

The Financial Services Authority says its supervision of small firms in the future is going to involve more “intensive individual firm interventions” as it focusses on a more intrusive style of regulation.

Jon Pain
Jon Pain, managing director of supervision at the FSA

In a speech to the City and Financial Intensive Supervision Conference today Jon Pain, managing director of supervision at the FSA, says under the regulator’s intensive style of regulation large firms will be subject to more mystery shopping and consumer research, while smaller firms will continue to be supervised through regional roadshows, firm visits and follow-up workshops, which he says have generally received positive feedback.

Pain says: “In addition, as a result of risk alerts and thematic work, we will make more intensive individual firm interventions. The recent banning of 80 mortgage advisers for fraud with fines of over £1m was one such intervention.”

Speaking about the FSA’s regulatory approach overall Pain says: “This intensive approach is not just a battle hungry FSA looking for confrontation for its own sake.

“Our message to firms is clear – where necessary we will intervene and we will not be pressurised to back off.

“Firms will be well advised to engage with us in a proactive and open-minded manner rather than believe they can bulldoze the regulator at the last minute.”

As part of its more intensive regulatory approach the FSA has also given greater emphasis to the role of senior management.

Since October 2008 Pain says this approach has led to over 400 interviews and the removal of more than 30 individuals from senior management posts.

He adds: “Firms need to take note that this is not just a box-ticking exercise.”


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  • peter 19th May 2010 at 10:04 pm

    just another sign that the FSA is a waste of space, they sit buy and let the banks sell non-advised rubbish on mass. Do they really think that bannig 80 brokers is justification for the £400+ million costs for the FSA in the comming year. Talk about trying to justify your own pointless jobs.
    Scrap the FSA now. There are many clients of banks who’ve been ill advised or mis sold now and in the past and the FSA haven’t raised a finger.
    Shame on you Mr Pain for being so smug, when you’ve achieved so little.

  • c lunt 19th May 2010 at 2:20 pm

    what an aptly named chap

  • Paul 19th May 2010 at 11:21 am

    Well done FSA. Target the small firms which are just bout surviving whilst leaving the banks to their own devices. Why not target the banks who offer non advised and unsuitable products. Take a look at the latest offering from C&G. FTB tracker with a headline rate of BBR + 0.45% which rises by year end to BBR + 5.49%. How can this be allowed. No broker would recommend yet the state owned institutions can get away with this without giving decent advice. Coalition government get a grip

  • Dan McGeehan 18th May 2010 at 5:25 pm

    Excellent strategy by the FSA to focus more on smaller firms as clearly by the failure to address Northern Rock’s failings they are not up to dealing with larger firms.