OUR PEOPLE |
OUR AWARDS |
OUR QUALITY |
OUR GROWTH |
OUR IT |
TESTIMONIALS |
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Please use the following links to view the latest press releases.
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Organised by the Direct Marketing Association (DMA), the first ever ethical marketing
event, ‘Ethical Marketing: The Business Opportunity’, will offer an
insight into the world of ethics and corporate responsibility. The event takes place
on 17 April 2007 at the Kensington Hilton, London and features a broad range of
speakers from environmental organisations, clients and agencies. |
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(Published: 3 Apr 2007 ) |
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A new teaching resource accompanying this year’s Young Direct Marketing Awards
2007 aims to address increasing calls to equip secondary school pupils with real-life
working and entrepreneurship skills.
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(Published: 9 Mar 2007 ) |
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A new DMA seminar, ‘Introduction to Door-to-Door Distribution’, is set
to equip businesses in the West with the knowledge to maximise the effectiveness
of door drops. Creativity, targeting, terminology and methodologies will all be
explained and illustrated with case studies at the half day seminar which takes
place on 15 March 2007 at Clarke Willmott in Bristol.
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(Published: 9 Mar 2007 ) |
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Research, conducted into usage of and attitudes towards door drops, has highlighted
the popularity and effectiveness of the medium.
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(Published: 30 Jan 2007 ) |
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The board of the Direct Marketing Association (UK) Ltd has today appointed Rosemary
Smith, managing director, RSA Direct, as chairman.
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(Published: 22 Jan 2007 ) |
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The DMA is creating a new industry group to establish new rules governing search
marketing.
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(Published: 7 Dec 2006 ) |
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The Direct Marketing Association (DMA) is fully supportive of the Information Commissioner’s
Office (ICO) move to serve an enforcement notice on five companies, which have been
found to be in breach of the Privacy and Electronic Communications Regulations 2003
(PECR).
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(Published: 7 Dec 200 6 ) |
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The ‘fuzzy felt’ customer acquisition campaign devised by Craik Jones
Watson Mitchell Voelkel for first direct is the winner of the 2006 Grand Prix at
the DMA (UK) Awards, in association with Royal Mail.
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(Published: 6 Dec 2006 ) |
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Email Service Providers (ESPs) are anticipating an increase in Christmas spending
of up to 50%, according to the latest DMA National Email Benchmarking Survey. Over
a third of ESPs expect an increase in year-on-year spending of 1525%, almost
20% anticipate an increase of 2650% and 5% of ESPs envisage a rise in Christmas
spending of over 50%.
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(Published: 30 Nov 2006 ) |
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The majority of client companies state that ‘reporting’ and ‘customer
service’ are the two most important factors when selecting an email service
provider (ESP), according to the first Client Email Marketing Survey from the DMA
Email Marketing Council.
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(Published: 28 Nov 2006 ) |
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The DMA has passed on details of nine member companies to the Direct Marketing Authority
following their failure to complete and return their annual Member Compliance Questionnaires
for the year ending 31 December 2005, as required by the Directing Marketing Association’s
Code of Practice.
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(Published: 27 Nov 2006 ) |
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The not for profit sector is set to steal the show at this year’s prestigious
DMA Awards - 19 of the 87 finalist spots have been awarded to campaigns for charities
including Oxfam, Refuge, NSPCC, National Phobics Society and last year’s Grand
Prix winner, Great Ormond Street Hospital Children’s Charity.
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(Published: 27 Nov 2006 ) |
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Results of the latest National Email Benchmarking Survey from the Direct Marketing
Association’s Email Marketing Council underline continued growth and success
of email
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(Published: 6 Oct 2006 ) |
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Equipping DM practitioners with knowledge of regulatory and legal requirements to
successfully plan and manage campaigns, the DMA Annual Direct Marketing Law &
Practice Conference will cover the latest legal developments and regulatory requirements
affecting the industry.
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(Published: 7 Aug 2006 ) |
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STATUTORY OBJECTIVES |
PRINCIPLES OF GOOD REGULATION |
FACTS & FIGURES |
BEING REGULATED |
FSA REGULATION & SUPPORT |
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The Financial Services and Markets Act gives us four statutory objectives:
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market confidence: maintaining confidence in the financial system
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public awareness: promoting public understanding of the financial system
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consumer protection: securing the appropriate degree of protection for consumers
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the reduction of financial crime: reducing the extent to which it is possible for
a business to be used for a purpose connected with financial crime.
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These are supported by a set of principles of good regulation which we must have
regard to when discharging our functions. The objectives also:
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provide political and public accountability. Our annual report contains an assessment
of the extent to which we have met these objectives. Scrutiny of the FSA by Parliamentary
Committees may focus on how we achieve our objectives
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govern the way we carry out our general functions eg. rule-making, giving advice
and guidance, and determining our general policy and principles. So, for example,
we are under a duty to show how the draft rules we publish relate to our statutory
objectives
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assist in providing legal accountability. Where we interpret the objectives wrongly,
or fail to consider them, we can be challenged in the courts by judicial review.
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The Financial Services and Markets Act gives us four statutory objectives:
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market confidence: maintaining confidence in the financial system
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public awareness: promoting public understanding of the financial system
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consumer protection: securing the appropriate degree of protection for consumers
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the reduction of financial crime: reducing the extent to which it is possible for
a business to be used for a purpose connected with financial crime.
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These are supported by a set of principles of good regulation which we must have
regard to when discharging our functions. The objectives also:
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provide political and public accountability. Our annual report contains an assessment
of the extent to which we have met these objectives. Scrutiny of the FSA by Parliamentary
Committees may focus on how we achieve our objectives
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govern the way we carry out our general functions eg. rule-making, giving advice
and guidance, and determining our general policy and principles. So, for example,
we are under a duty to show how the draft rules we publish relate to our statutory
objectives
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assist in providing legal accountability. Where we interpret the objectives wrongly,
or fail to consider them, we can be challenged in the courts by judicial review.
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In pursuing our functions under the Act, we are required to have regard
to additional matters that we refer to as 'principles of good regulation'.
These are:
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The need to use our resources in the most efficient and economic way:
The non-executive committee of our Board is required, among other things, to oversee
our allocation of resources and to report to the Treasury every year. The Treasury
is able to commission value-for-money reviews of our operations. These are important
controls over our efficiency and economy.
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The responsibilities of those who manage the affairs of authorised persons:
A firm’s senior management is responsible for its activities and for ensuring
that its business complies with regulatory requirements. This principle is designed
to guard against unnecessary intrusion by the regulator into firms’ business
and requires us to hold senior management responsible for risk management and controls
within firms. Accordingly, firms must take reasonable care to make it clear who
has what responsibility and to ensure that the affairs of the firm can be adequately
monitored and controlled.
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The restrictions we impose on the industry must be proportionate to the benefits
that are expected to result from those restrictions:
In making judgements in this area, we take into account the costs to firms and consumers.
One of the main techniques we use is cost benefit analysis of proposed regulatory
requirements. This approach is shown, in particular, in the different regulatory
requirements we apply to wholesale and retail markets.
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The desirability of facilitating innovation in connection with regulated activities:
This involves for example, allowing scope for different means of compliance so as
not to unduly restrict market participants from launching new financial products
and services.
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The international character of financial services and markets and the desirability
of maintaining the competitive position of the UK:
We take into account the international aspects of much financial business and the
competitive position of the UK. This involves co-operating with overseas regulators,
both to agree international standards and to monitor global firms and markets effectively.
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The need to minimise the adverse effects on competition that may arise from our
activities and the desirability of facilitating competition between the firms we
regulate:
These two principles cover avoiding unnecessary regulatory barriers to entry or
business expansion. Competition and innovation considerations play a key role in
our cost-benefit analysis work. Under the Financial Services and Markets Act, the
Treasury, the Office of Fair Trading and the Competition Commission all have a role
to play in reviewing the impact of our rules and practices on competition.
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see also: |
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Structure: Information on the structure of the FSA |
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The Board: Read the biographies of the FSA's board of directors |
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We are the main statutory regulator for the UK financial services industry. We were
established by an Act of Parliament in 2000 and formally gained our powers on 1
December 2001.
We regulate some 29,000 firms, which includes EEA firms passporting into the UK,
ranging from global investment banks to very small businesses, and around 165,000
individuals. This industry contributes 6.8% of UK GDP and employs over 1.1 million
people, providing products and services to millions of consumers.
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We were given four specific, and equal, objectives by Parliament. These are: maintaining
market confidence; promoting public understanding of the financial system; securing
the appropriate degree of protection for consumers; and fighting financial crime.
In our day-to-day operations, we aim to promote efficient, orderly and fair markets,
help retail consumers achieve a fair deal and improve our own business capability
and effectiveness.
In practice, this means that we want to make markets work effectively to deliver
benefits to firms and consumers. We operate a risk-based approach concentrating
on the big risks and accepting that some failure neither can, nor should, be avoided.
Potential risks are prioritised, using impact and probability analysis, and we then
decide on an appropriate regulatory response in other words, what approach
we will take and how much resource we will allocate to mitigating the risk.
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Our budget is met from a levy on the firms we regulate. We receive no funding from
the taxpayer. The amount each firm pays is determined according to its size and
the types of business it undertakes. When financial penalties are imposed on firms
or individuals, the proceeds are used to reduce fees in the following financial
year.
Our budget for 2006/07 is £276 million. In terms of indirect costs, research
by European Economics in 2003 put compliance costs incurred by firms at 1.6% of
their total operating costs. The FSA and the independent Practitioner Panel (a statutory
body that represents the interests of regulated firms to the FSA) are undertaking
further work this year on the indirect costs of the regulatory regime, with particular
focus on the position of small firms.
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The scope of our authority was initially set out in the Financial Services and Markets
Act 2000 (FSMA). Since then, Parliament has extended our responsibilities to include,
for example, mortgage lending and insurance broking.
Some financial services, such as consumer credit and occupational pension schemes,
are not regulated by the FSA. In addition, some businesses that may appear to be
offering financial services, such as buy-to-let property clubs or compensation claim
handlers, fall outside the FSA's scope.
Only Parliament currently has the authority to add to the FSA's remit.
When deciding how to regulate, we aim to intervene only where there is a market
failure and where the benefits of doing so are likely to outweigh the costs. This
cost-benefit analysis helps us to achieve a proportionate response to the risks
we identify it is widely regarded as well ahead of practice in most other
jurisdictions.
In policy-making, cost-benefit analysis ensures that initial ideas that do not deliver
benefits in excess of potential costs are returned to the drawing board or dropped
all together. Our analysis is published, enabling interested parties to suggest
policy changes, as in the recent work on 'soft commissions' and the introduction
of mortgage and general insurance regulation.
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The FSA's powers derive, ultimately, from Parliament; in practice, we are accountable
in a number of ways to the public, industry, government and Parliament.
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The independent Practitioner and Consumer Panels, whose status is set out in FSMA,
exist to ensure that the views of consumers and the industry are taken into account
by the FSA. We are required to respond formally to their representations
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Complaints against the FSA may be investigated by an independent Complaints Commissioner,
whose findings are published
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There is scope for judicial review of FSA decisions
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FSA rules are subject to scrutiny by competition authorities
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We make an annual report to Parliament, which is published, and the chairman and
other senior directors make regular appearances before the Commons Treasury Select
Committee.
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We employ around 2,800 people, almost all at our offices in
Canary
Wharf
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Staff are often drawn from (and, indeed, return to) regulated firms and the professional
services firms that advise them. More than half our staff comes from the industry
and at any one time around 100 people are seconded to or from the industry and other
bodies. Annual staff turnover is well below the industry average, at around 9.2%.
The FSA's graduate development programme has produced 197 staff since 1999; we aim
to recruit 60 graduates every year. More than 10% of staff are studying for professional
qualifications; many others already hold these.
Staff are able to pursue broad-based careers, with the opportunity to move around
the organisation or to specialise. We aim to pay staff around the market median
for comparable roles in the industry, with high performers able to earn significantly
more than this; in 2004/05, the average remuneration package, excluding pension
contributions, was worth £56,000.
The FSA Board comprises the chairman, chief executive, three managing directors
and 10 non-executives, from industry, consumer and other backgrounds, all representing
the public interest.
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The FSA's philosophy is that consumers should be provided with the information that
they need in order to make informed decisions about their financial arrangements;
that this information should be fair, clear and not misleading; and that customers
have the right to expect that any professional advice they receive is appropriate
for their individual circumstances.
With these rights, however, come responsibilities to ensure that the information
they provide to their advisers is accurate and complete; to give proper consideration
to the products or services being offered to them; and to make sure that they fully
understand any risks associated with the product before they buy.
In a competitive market, firms must not be prevented from offering innovative or
high-risk products to those investors who are prepared, on the basis of an informed
judgement, to accept the risks.
We can and do intervene where we see the risk or reality of products
being mis-sold. We can issue consumer warnings, via our website and the media; recent
examples have included warnings on high-income bonds, venture capital trusts and
equity release schemes. We have a group which identifies potential risk and takes
action to, in effect, nip potential problems in the bud. Finally, where individual
instances of mis-selling have occurred, we can take enforcement action and secure
redress for customers.
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Our powers enable us to censure or fine firms that fail to follow our rules, but
we are not an 'enforcement-led' regulator and formal disciplinary action is only
one of the tools available to us. Under our risk-based approach, we cannot attempt
to pursue every rule breach and so minor problems are usually resolved through the
day-to-day relationships that we have with regulated firms, without the need for
any formal regulatory action to be taken.
We select cases to investigate formally according to their seriousness and how they
fit with our priorities there are no targets for the number, size or type
of cases investigated by our enforcement division. Similarly, there is no 'table
of penalties' used when determining the level of financial penalties. Each case
is considered individually and any penalty based solely on the seriousness of the
breaches concerned.
In 2005 we undertook a thorough review of our enforcement processes which made a
number of recommendations regarding the process of investigating cases and making
decisions. The
Enforcement Process Review team's report was published in
July 2005.
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We are only one part of a regulatory framework that also provides a free complaint
resolution service and a 'safety net' to provide compensation to individual customers
when financial firms go out of business.
The Financial Ombudsman Service adjudicates on complaints that have not been resolved
by the relevant firms. We do not duplicate this service by investigating individual
complaints ourselves, but we will undertake investigations where it appears that
a particular firm or product is attracting a disproportionate number of complaints.
The Financial Services Compensation Scheme steps in when financial firms go out
of business owing money to their individual customers. It does not compensate customers
for poor investment performance.
We do not provide compensation to consumers. In some enforcement cases, we are able
to secure compensation from firms for customers who have lost out as a result of
the firms' behaviour. This compensation is paid directly by the firm, not via the
FSCS.
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The reduction of financial crime is one of the FSA’s four statutory objectives:
the Financial Services and Markets Act 2000 requires us to aim to reduce the extent
to which regulated persons and unauthorised businesses can be ‘used for a
purpose connected with financial crime’. Financial crime includes any offence
involving money laundering, fraud or dishonesty, or market abuse. The objective
interacts with our three other objectives: protecting consumers; market confidence;
and public awareness.
In pursuing our financial crime objective, our main focus is on firms’ risk
management, systems and controls. We also work closely with the range of other organisations
involved in fighting financial crime such as the government, law enforcement,
trade associations, the Joint Money Laundering Steering Group in developing
and delivering effective defences against financial crime.
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By definition, scams such as so-called boiler rooms operate outside the regulatory
regime, as well as, in many cases, outside the UK, so we rarely have any jurisdiction
over them. Some unauthorised firms arrange for their promotional material to be
approved by an FSA-regulated firm, in which case we can take action if the material
is misleading (one firm was fined £20,000 in 2005 for doing this). We also
encourage overseas regulators to take action against scams operating in their countries
but targeting the UK.
The FSA website contains details of scams that have come to the Authority's attention,
including lists of firms known to be targeting UK investors, but this in an area
in which common sense and caution on the part of individual investors is the most
effective form of protection.
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We do not have a formal objective to promote the industry we regulate, but in pursuing
our objectives we have to take into account the UK's competitive position internationally
and ensure that our regulation is not disproportionate. Our approach is based on
making the retail and wholesale markets work effectively. This means that (except
where regulation is required by government or EU legislation) regulation is proposed
only where there is market failure and where there is a realistic chance that regulation
can correct that failure without imposing excessive costs.
Our day-to-day approach is also different from that adopted by regulators in many
other countries and, comment suggests, contributes to the UK's attractiveness to
international financial firms. For example, one benefit of being an integrated regulator,
covering both prudential and conduct of business regulation and combining banking,
insurance and securities, is that a large firm that was previously regulated by
a number of different regulators now has a single regulator at the FSA looking after
all aspects of their business. This eliminates the need for compliance staff, and
senior management, to develop duplicative relationships with each regulator individually.
Our aim is that the FSA staff supervising each such firm should develop a thorough
understanding of the business, to ensure that regulation is proportionate and genuinely
risk-based. However, we have not taken the step, as has happened in some countries,
of requiring large firms to provide facilities so that our staff can be actually
based on their premises at all times.
The outcome we seek is that the UK is regarded internationally as a good place in
which to do business. Third-party analysis suggests that this aim is being achieved.
For example, the CBI (Oct 2004) and the Corporation of London (Nov 2005) rated the
regulatory environment in the UK ahead of that in the US and materially ahead of
the rest of Europe. The CSFI (June 2003) also ranked the UK financial environment
above France and Germany and equal with the US. The ABI (Feb 2005) stated that one
of the most important reasons why London is the largest and most liquid market in
Europe is the contribution made by the regulatory environment.
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Around 90% of the firms we regulate are categorised as 'small' and, as such, do
not have a dedicated supervisor. One of our three aims is to make it easier for
these firms to work with us and when implementing policies we consider carefully
the likely effects specifically on small firms.
Recent initiatives to assist small firms include: a
firms online service enabling firms to handle most routine
dealings with the FSA on the Internet, at their own convenience; personal handbooks
which allow firms to select only those parts of the FSA rulebook that apply to their
business and produce their own reference guide; discounts on FSA fees for firms
that operate in many areas but undertake only small amounts of business in each;
working with a commercial credit provider to introduce a facility to enable firms
to pay their fees by instalments; and a series of open events around the country
to answer firms' questions and advise them about the implications of new developments.
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Our scope covers firms advising on and selling personal pensions, stakeholder pensions
and annuities. We have prudential oversight of the firms that provide such products,
so can set requirements for them to set aside sufficient reserves to meet their
future liabilities, but we have no authority over occupational ('company') pension
schemes and so cannot influence the way in which companies operate their staff pensions
schemes. These are regulated by The Pensions Regulator.
Through our public awareness work, we are able to provide generic information about
planning for retirement; we have recently, for example, re-published our basic guide
to pensions, updated to explain the impact of forthcoming changes to pension law.
We hold no view on whether pension law should be changed (to introduce compulsory
schemes, for example); such matters are for government to decide.
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Around 70% of our policy work is driven by the requirement to implement European
Directives to which the government has agreed. Although there is not yet an adequate
EU equivalent to our own approach to policy development, including cost/benefit
analysis and the requirement for proportionality, we have no latitude to refuse
to implement any directive.
Our approach is not to impose obligations beyond what is required by directives
(so-called super-equivalence) unless this is necessary to achieve the statutory
objectives and can be justified by cost/benefit analysis.
Senior FSA staff are actively engaged in influencing the European agenda, including
seeking to ensure that the same disciplines that are applied to UK policy development
are applied in the EU.
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Our approach is underpinned by the principle that it is neither possible nor desirable
to write a rule to cover every specific situation or need for decision that a regulated
firm might encounter. Instead, we focus on the Principles set out in the FSMA. These
set out in more general terms the types of behaviour that we expect of firms and
individuals (for example 'A firm must conduct its business with due skill,
care and diligence').
Many in the financial services industry, particularly at senior level, support this
approach. However, our experience is that many of those operating in compliance
or legal departments within regulated firms have yet to become comfortable with
this approach and consistently seek detailed guidance on how to interpret principles
in specific situations. We expect that understanding of how to operate in a more
flexible, principles-based regime will evolve over time. In the meantime, we accept
that, as an inevitable result of amalgamating the rulebooks of all our predecessor
regulators, the FSA rulebook is a large document. In practice there are few (if
any) firms to whom all of the rulebook applies, but we believe there is scope to
reduce it and are looking at ways of achieving this.
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The FSA's budget for 2006/07 is £276 million.
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In 2004/05 the FSA had an average of 2,356 employees, including executive directors.
At 31 December 2005 the FSA had around 2,800 employees.
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Sir Callum McCarthy's total remuneration for 2004/05 was £382,448. This was
made up of £314,000 salary and £68,448 of other emoluments and benefits.
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John Tiner's total remuneration for 2004/05 was £540,242. This comprised £365,000
salary, £65,000 performance-related bonus and £110,242 of other emoluments
and benefits.
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The FSA regulates about 29,000 firms.
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As at 31 March 2005: 165,587.
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Total amount of fines: £68,496,643.
See
fines
table for more information.
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see also: |
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Small Firms: Targeted
regulatory information for small firms |
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Once firms are regulated by us, we require them to meet the standards set out in
our Handbook of Rules and Guidance and to supply us with information, so that we
can monitor their business.
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'Supervision' is our process of monitoring and regulating firms to ensure they are
complying with the regulatory requirements.
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As well as authorising firms to conduct regulated activities, we 'approve' particular
individuals in firms who carry out particular functions ('controlled functions').
We require firms we regulate to ensure that their staff are competent to carry out
the functions for which they are employed.
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The FSA is funded entirely by fees levied on the industry we regulate. We consult
annually on our fee proposals.
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In the interests of improved efficiency, we are gradually moving to mandatory electronic
reporting of this information by all firms, except credit unions.
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We require firms to notify us of certain changes in their business, for example
a change of controller. Firms can apply to us for particular purposes - for example,
to obtain a rule waiver or a variation of their permission.
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Firms we regulate must ensure that 'financial promotions' which they issue - advertisements,
marketing material etc - is clear, fair and not misleading.
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Our rules require firms to treat customers fairly. We have developed material based
on findings of good and poor practice to help firms understand what this requirement
may mean for them.
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We have powers under the Unfair Terms in Consumer Contract Regulations 1999 (the
Regulations) relating to the fairness of terms in standard form consumer contracts.
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We are making increasing use of web technology to enable firms to communicate with
us. Through Firms Online firms can access forms to enable them to send us information
quickly and reliably.
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Where we discover material failure to comply with our standards, we consider taking
enforcement action. Where firms are thinking about covert taping and disclosure
of private discussions between FSA staff whilst they are visiting firms, we consider
this unacceptable and unlawful. For further details see
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