The Financial Services Authority (FSA) has today published a discussion paper which explores the creation of a framework for determining what further information the regulator might publish about firms and industry sectors.
The FSA recognises the importance of transparency and believes that increasing the amount of firm-specific and broader industry information it discloses could lead to better regulatory outcomes for firms, markets and consumers.
However, the FSA recognises that stakeholders hold strong and often polarised views on transparency, which is why the regulator wants to initiate a full and open debate that involves all those who may be impacted by its proposals.
In its discussion paper, the FSA sets out a code of practice which would provide a transparent mechanism for guiding FSA decisions about what additional information it might disclose. The paper also provides examples of the types of information the regulator may consider publishing. Importantly, the paper draws a clear distinction between simply making information available, which could in some cases cause confusion and have a negative impact, and publishing information in a way that makes issues and practices clearer and therefore improves how markets function.
The FSA already publishes a wide range of material about its activities and proposals, markets and sectors, and about the disciplinary action it takes against individuals and firms. The regulator also publishes a great deal of consumer-facing material, such as fact sheets and comparative tables.
Hector Sants, chief executive of the FSA, said:
"We believe that transparency is an important regulatory tool, and as an organisation are committed to being open and transparent. The discussion paper seeks to initiate debate on how we can better utilise transparency to achieve our regulatory aims, and in particular proposes a code of practice."
The FSA invites comments on the proposals in its discussion paper by 29 August 2008.
Background
- DP08/3: 'Transparency as a regulatory tool' is available on the FSA website.
- The FSA has today published a consultation paper – CP08/10 – on proposed changes to its Decision Procedure and Penalties (DEPP) manual and Enforcement Guide (EG). It includes proposals that are relevant to the issues discussed in DP08/3.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
