MPs angered by FSA's 'unacceptable' response
Friday 22 July 2011
A war of words broke out yesterday between MPs and the Financial Services Authority (FSA) over the timetable for the introduction of the new-look financial advice regime.
Andrew Tyrie, the chairman of the Treasury Select Committee, accused the FSA of "unnaceptable" behaviour in its quick response to MPs' demands that the changes – known as the Retail Distribution Review – should be delayed for 12 months from their planned introduction in January 2013.
Mr Tyrie said the FSA was "precipitate" in "rejecting in a peremptory manner our recommendation". In a letter to the regulator's chief executive, Hector Sants, Mr Tyrie said the speed of the FSA's response suggested "that no adequate consideration had been given to the arguments".
The MPs proposed the delay to give advisers more time to comply with the new rules, which include cutting out commission. But the FSA's response to the committee's report was issued within hours and intimated that the regulator would go ahead with the planned timetable.
Mr Sants publicly attempted to appease the MPs yesterday. In reply to Mr Tyrie, he said: "I can assure the committee that the FSA is considering carefully the recommendations."
But he added: "We believe it is very important to maintain momentum for these reforms and to see professional standards raised." He pointed out that the committee broadly endorsed the proposals and warned of the dangers of "losing momentum".
The signal from the FSA's Canary Wharf base is that it will not be deflected from introducing the changes that were first laid out four years ago.
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