Andrew Whittaker, FSA General Counsel, said:
"Our decision to remove examination requirements from individuals in the wholesale markets reflects our aim to move to a more principles-based approach by allowing wholesale firms to take their own decisions about the competence of their staff." These changes to the T & C regime are set out in FS06/1. The consultation produced a range of views. Many welcomed the increased flexibility which our proposals provide, but some expressed concerns that the removal of detailed rules for wholesale business could lead to a lowering of standards. However, the FSA believes that these concerns are largely based on a misunderstanding of how the T & C regime currently works. The Feedback Statement explains why these changes will not alter the standards of competence expected of firms and how these standards will be maintained.
The FSA's Consultation Paper last July proposed two other sets of changes to simplify and reduce the burden of regulation on firms: these proposed changes were to the Money Laundering and Approved Persons regimes. The FSA confirmed in January in PS06/01 that it will remove the existing detailed rules on anti-money laundering controls in their entirety, replacing them with high-level requirements for firms to have their own risk-based controls on money laundering. Today's Feedback Statement is confined to the T & C proposals as the FSA is still considering the impact MiFID may have on the Approved Persons regime. The FSA expects to publish feedback once it is clearer on the impact that MiFID has on this issue. It will aim to implement these changes in a way that best fits with the wider changes associated with MiFID.
The Handbook Review programme focuses on eliminating or changing requirements which are more restrictive than needed to achieve the FSA's statutory objectives, which do not deliver benefits to justify their costs, or which are not consistent with the FSA's focus on senior management responsibility.
