There is no doubt that the sheer volume of regulatory reform on the horizon will create considerable challenges for organisations in terms of the resource required to make certain they are ready and able to operate compliantly.

In its ’Risk Outlook‘ for 2006, the FSA stresses that organisations will need to devote adequate resource, (including senior management time) in order to address, in particular, the issues relating to implementation and risk management. 

In the year ahead organisations are faced with a myriad of new regulation including:

• Implementation of the Markets in Financial Instruments Directive (MiFID)
• Capital Requirements Directive (CRD)  implementation
• Emerging/ new regulation in payment services, money laundering , solvency, clearing and settlement, and mortgages
• Simplification of COB rules, which will include senior management responsibilities, a new financial promotions regime, and new point of sale disclosure
• Consultation regarding the regulation of Home Reversion Schemes, commenced in April 2006, with new rules due in Q1 2007. Applications for authorisation are due to commence in Q4 2006
• Consultation relating to Ijara Home purchase plans, commenced in April 2006, with new rules scheduled for Q1 2007
• New rules for Self-invested Personal Pensions (SIPP’s), due in Q4 2006, along with new applications for authorisation
• New Individual Capital Adequacy Standards for insurance organisations  by end of 2007

In addition, during 2006, the FSA will also review the regulatory structure of the following business areas:

• Mortgage Regulation Review: report to industry in Q3 2006
• GI Regulation Review: Starting April 2006
• Asset Management Review: focusing on dual-pricing and eligible assets
• Retail Investment Products and consumer protection, in particular the increasing nature of product complexity. Feedback in Q1 2006 and rules consultation in Q1 2007
• Unit-linked insurance: a ’good practice guide‘ is to be introduced on pricing and product governance and a review of permitted links between Insurance and Collective Investment Schemes

How we can help

• Provide induction, ongoing or remedial training and coaching to your staff on the latest emerging FSA rules and how they impact on doing business
• Review your current senior management systems and control’s and your ability to deal with and implement emerging regulation
• Review and report on the effectiveness of your arrangements to implement emerging regulation
• Supply you with interim/seconded compliance resource to support your work on assessing and advising on new regulatory issues and how they are implemented within your organisation
• Project management to support your new rules initiatives
• Provide you with technical assistance to support your understanding of your regulatory obligations.