HISTORIC PRESS RELEASE : Patricia Hewitt strengthens accountability framework of the new financial regulator [January 1999]
The press release issued by HM Treasury on 19 January 1999.
New measures to ensure that the new financial services regulatory regime is open and accountable have been announced today by the Economic Secretary, Patricia Hewitt.
The measures follow responses to the consultation on the draft Financial Services and Markets Bill which will establish the Financial Services Authority (the FSA) as the single financial regulator. They are:
- the Treasury will have the power to commission an independent report, at periodic intervals, into the efficiency and economy of the FSA’s operations;
- the bill will require a majority of the FSA Board members to be non-executives;
- the FSA will be required to maintain consumer and practitioner panels. The panels will have a role in assessing the performance of the FSA against its statutory objectives;
- the FSA will be required to hold an annual public meeting to discuss its annual report. The Treasury will also be discussing with the FSA an agreed list, to be published in due course, of contents of the annual report; and
- the FSA will be required to consult upon its arrangements for independent investigation of complaints made against it. As well as being able to report publicly on his investigations, the investigator will also have the power to publish the FSA’s responses to his recommendations.
There will also be new safeguards in the bill covering the FSA’s rule-making processes. These will mean:
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the FSA will have to include an explanatory memorandum when proposing new rules or changes to existing rules setting out the purpose of the proposals and their compatibility with the regulatory objectives;
- when the final rule change is published the FSA will be required to publish a statement of any alterations from the original proposal and to issue a revised version of the cost-benefit analysis.
Announcing the measures Ms Hewitt said:
“There is widespread support for our determination to ensure that the FSA continues to operate in a fair, open and accountable manner.
“These measures will build on the accountability framework in the draft Bill. The framework will ensure that the FSA is properly accountable to Ministers and Parliament, and to practitioners and consumers.”
