The introduction of the FSA has undoubtedly helped to raise standards in the market and get rid of ‘cowboy firms’, but this need to regulate shows no signs of abating. European legislation looks set to dominate the regulatory market in 2007, and although people have suggested the EU’s Markets in Financial Instruments Directive will have little impact on the market, there will be some form of crossover that we currently can’t plan for.
The FSA’s move to principles, I think, should be welcomed, but with this struggle between the EU and UK markets I can see the move stuttering. While demolishing its rulebook in favour of principles-based regulation, EU directives could potentially lead to a whole new book for financial services firms to understand, and what good will that do? Most of our time is already spent away from the customer and behind a desk checking for regulatory updates and completing forms, and this could put further pressure on our valuable time.
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