FSA publishes Annual Report 2011/2012 – The FSA has published its Annual Report for 2011/2012, outlining its performance against the priorities set out in its 2011/12 Business Plan and its statutory objectives. The Annual Report sets out the FSA’s performance against the following main objectives:
- • executing the Government’s regulatory reform programme – this remains on track for the creation of the Prudential Regulatory Authority and the Financial Conduct Authority from the beginning of 2013;
- • executing a credible deterrence and enforcement approach throughout 2011/12 – for further detail, see also the Enforcement Annual Performance Account 2011/12;
- • delivering the FSA’s financial stability objective – among other things, the FSA continues to influence both international and European policy agenda, concentrating, in particular, on the Solvency II Directive and Basel III;
- • delivering efficient, clean, orderly and fair markets that remain attractive and sustainable – the FSA continues its work in connection with the reform of over-the-counter derivatives and review of the credit rating agencies’ regime; and
- • development of a new consumer protection strategy – the FSA is progressing its work regarding the Retail Distribution Review, Mortgage Market Review, life insurance, packaged bank accounts, as well as redress for consumers in the areas such as structured products, payment protection insurance, mortgage advice and protection of client money.
The Annual Report reviews the FSA’s performance during 2011/12 against its five key objectives:
1. Executing the Government’s regulatory reform programme:
•Working with the Bank of England, the FSA has completed the high level design work for the PRA and FCA;
•Established internal twin peaks within the FSA from April 2012;
•The programme remains on track for the creation of the two new authorities from early 2013.
2. Executing a credible deterrence and enforcement approach throughout 2011/12:
•Five significant criminal cases came to court in 2011/12;
•16 defendants went on trial in 2011/12 on charges of insider dealing or misleading the market, while another 5 are currently awaiting trial;
•Highest ever fine for market abuse: $9.6 million fine for Rameshkumar Goenka under the FSA’s new penalty framework.
3. Delivering the FSA’s financial stability objective:
•Supporting the interim Financial Policy Committee (FPC) and delivering on its recommendations;
•Ensuring that the major financial institutions have adequate capital and liquidity and working with the banks to ensure they have effective recovery and resolution plans;
•Continuing to influence the international and European policy agenda, with a focus on the two biggest policy initiatives: Solvency II and Basel III.
4. Delivering efficient, clean, orderly and fair markets that remain attractive and sustainable:
•Maintaining high quality, transparent and open markets, vital to the UK’s position as a leading international financial centre. The level of abnormal price movements prior to company announcements, which the FSA uses to measure market cleanliness, continued to decline from 21.2% in 2010 to 19.8% in 2011. The 2010 and 2011 levels are the lowest since 2003;
•Continuing to reform OTC derivatives to reduce systemic counterparty risk;
•Implementing and embedding the existing European regulatory regime for Credit Rating Agencies and participating in policy negotiation to revise that regime.
5. Continued progress in developing a new consumer protection strategy:
•Progressing our work on major policy initiatives such as the Retail Distribution Review (RDR) and Mortgage Market Review (MMR), while reviewing the areas of life insurance and packaged bank accounts;
•Securing greater redress for consumers in the areas of structured products, UCIS, Payment Protection Insurance (PPI), mortgage advice and the treatment of mortgage customers with mortgage arrears, and the protection of client money.
Additional statistical information on the FSA’s work during 2010/11 can be found in the appendices in the report published today, together with the Enforcement Annual Performance Account which sets out details of the FSA’s enforcement work.
Copies of the Annual Report; Enforcement Annual Performance Account; press release; and related webpage are available
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