Aims of FSA
The aim of FSA is to promote efficient, orderly and fair markets, and to help retail consumers to get a fair deal. In fact, FSA has set out its aims under three broad headings, i.e., Promoting efficient orderly and fair markets
It works to promote efficient, orderly and fair markets which affects both wholesale and retail firms. Where it has discretion, it works with the industry to address market failures - preferring market-based solutions to regulatory intervention wherever possible. Where its work is non-discretionary, for example, when EU directives drive it, it devotes significant resource to assisting the Treasury and the Lamfalussy Committees - the Committee of European Securities Regulators (CESR), the Committee of European Banking Supervisors (CEBS) and the Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) - in negotiations.
For firms, the most significant European measures, which they will continue to need to prepare for, are the Markets in Financial Instruments Directive and the Capital Requirements Directive.
Helping retail consumers to achieve a fair deal
One of the key priorities of FSA is to make the retail markets function more effectively and therefore, help retail consumers achieve a fair deal. To achieve this aim it focus on what four key features of effective retail markets:
- Capable and confident consumers;
- Clear, simple, and understandable information available for, and used by, consumers;
- Soundly managed and adequately capitalized firms that treat their customers fairly; and
- Risk-based and more principles-based regulation, through firm specific and thematic supervision and policy.
Its move towards a more principle-based approach to regulation will bring in benefits for firms as well as consumers. It will provide the firms with greater flexibility to determine how best to run their business and how to deliver fair treatment to customers in a way, which is consistent with commercial objectives. It will also enable the firms to compete and innovate more effectively in areas such as product design and customer service.
Improving the business capability and effectiveness
The third strategic aim of FSA is to improve business capability and effectiveness. This covers not only the investment it makes in employees, internal processes and infrastructure, but also making it easier for firms, consumers, and other stakeholders also. The Regulatory Services Business Unit leads this work.
One of the core activities of this Business Unit is to provide services to external stakeholders. For the benefit of its consumers, FSA runs contact center, which answers queries about the financial services regulatory system and its role and activities, and distributes extensive range of information to them on request. The Business Unit handles most of the regular interactions with firms, which include the incoming correspondence and calls to the Firm Contact Center, applications for waivers, variations of permission, cancellations, changes of controller and payment of fees.