SIB increases budget to pounds 19m to fight fraud: Management plan will lead to more openness and accountability

THE Securities and Investments Board (SIB), the senior investment regulator, is stepping up its fight against fraud with a 7.5 per cent increase in its budget to pounds 18.7m.

John Young, the recently appointed SIB chief executive, has responded to the Large Review's demands for greater openness and accountability from investment regulators with a wide-ranging management plan for 1994-5.

Mr Young said: 'This is an ambitious plan which is being implemented at a time of high activity and change. I am confident that SIB will be equal to the leadership challenge and public demands which have been placed on it.'

Mr Young, a former British Lions rugby player, aims to double the number of SIB enforcement officers this year. The increased emphasis on enforcement and the supervision of recognised professional bodies will lead to significant increases in fees, he says.

But the aim is to increase enforcement while cutting the amount spent on checking other regulators' rulebooks. More effective enforcement will also help to save money in the long run, says Mr Young, since regulators will have to pay out less compensation when member firms go bust or are shut down.

Under the plan, the SIB is being divided into four divisions, Supervision, Enforcement, Policy and Legal Affairs, and Operations. SIB is also publishing its budget and plans for the first time.

Supervision will have four main priorities: to maintain firmer supervision of all recognised bodies and to establish clear standards of regulation, which they must observe.

Second, it must ensure that the Personal Investment Authority discharges its responsibilities fully from the outset. Third, SIB must retreat as far as possible from direct regulation of firms; finally it must consider an application for recognition from the new automated share settlement system, Crest, being designed by the Bank of England.

The Enforcement division will concentrate on dealing with unauthorised investment businesses, providing support to the recognised bodies' bigger investigations, and boosting co-operation with other authorities.