News & Views

Archived content. For investment professionals only.

Who is not looking at the Regulators Code?

8 Mar 2011

At the RDR morning I was amazed that so few IFAs were aware of the Regulators Code. This is an important document and should be considered by the FSA.

The regulators code makes interesting reading, in fact you can access it on our website.

Its aim, well stated in a forward by Jim McFadden MP is to embed a risk-based, proportionate and targeted approach to regulation and enforcement among the regulators it applies to.

The term ‘regulator’ is clearly defined in the code as any organisation that exercises a regulatory function.

This does not apply in Wales, Scotland, and Northern Ireland!

A regulator is not bound to follow a provision of the Code if they properly conclude that the provision is either not relevant or is outweighed by another relevant consideration.

Importantly, the Code does not relieve regulated entities of their responsibility to comply with their obligations under the law.

The code is based on the Hampton Principles and states regulatory activities should be carried out in a way which is transparent, accountable, consistent and proportionate; and that regulatory activities should be targeted only at cases in which action is needed.

The following are among its stated aims and intentions consideration-

  • To act as an enabler to economic activity.
  • To consider the impact that their regulatory interventions may have on economic progress, including the costs, effectiveness and perceptions of fairness of regulation.
  • They should ensure that any decision to depart from any provision of the Code is properly reasoned and based on material evidence.
  • Where there are no such relevant considerations, regulators should follow the Code.
  • They should only adopt a particular approach if the benefits justify the costs and it entails the minimum burden compatible with achieving their objectives.
  • Regulators should seek to reward good levels of compliance by way of lighter inspections and reporting requirements where risk assessment justifies this.
  • They should also take account of the circumstances of small businesses, including any difficulties they may have in achieving compliance.

The Regulators code of 2007 is seemingly continuing to be overlooked by the FSA. It spells out clearly what it is not being applied to the thinking of the FSA in establishing the framework for the RDR.


Has the FSA concluded that the concerns of so many, including MPs, in regard to the RDR are not relevant or are totally outweighed by other relevant considerations?


Email this article Print Share on Twitter Share on LinkedIn Share on Facebook Share on Google+


Not yet registered?

Please complete this form to join our community

Select your role:
Confirm Password



Join the Panacea community

Join the Panacea community for free and recieve news, guides, whitepapers, event information, special offers and more!