Franklin, Andrews, Kramer & Edelstein

[scion]

Financial Services Authority announces final stage of operational reforms with new integrated operating structure

FSA/PN/088/2009
02 July 2009
http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/088.shtml

The Financial Services Authority (FSA) has announced a new operational structure designed to better align its internal operating model to its core activities of identifying and mitigating risk, supervision and enforcement. The reorganisation also takes account of the changing role of the FSA in respect of international regulatory engagement, macro-prudential analysis and consumer financial education.

The changes will take effect from 1 October and will conclude the significant internal reforms the FSA has undertaken during the last two years, incorporating the lessons learned from the banking crisis, the Northern Rock internal review and the priorities outlined in the Turner Review.

Hector Sants, FSA chief executive, said:

"This new structure completes the radical internal reforms that I initiated when I became CEO in July 2007.

"The new structure will underpin the radical changes we have made to our supervisory processes through the Supervisory Enhancement Programme (SEP). SEP was designed to deliver a significant increase in our supervisory resource and changes to the way we work, in particular for 'high impact' or systemically important firms. The programme is on track and will be completed by the end of this year."

The six specific benefits resulting from the organisation changes are:

1. Integration of retail and wholesale firm supervision into one Supervision business unit under managing director, Jon Pain, which will ensure long term consistency and flexibility to the implementation of the FSA's supervisory philosophy.
2. Integration of risk identification, risk management and policy formulation into one Risk business unit under managing director, Sally Dewar. Grouping all the FSA's technical specialists in one group will ensure, at all times, the required focus on conduct and prudential risk.
3. Expansion of the existing Financial Stability team to become a new, enhanced division under director David Strachan, focusing on macro-prudential issues and providing the central link for the FSA with the wider macro-prudential framework.
4. Creation of a new International division, under director Verena Ross, which will enable the FSA to significantly increase our engagement with international fora.
5. Integration of Enforcement and Financial Crime to form one division under director Margaret Cole, which will enable the FSA to better extract the synergies in this important area, to enhance delivery of its credible deterrence strategy.
6. Financial Capability division will move from the existing Retail business unit to become a standalone division, under director Chris Pond and will report directly to Hector Sants. This will put the FSA in a better position to take forward the national roll-out of the Money Guidance service, as announced in the 2009 Budget.

Hector Sants continued:

"These changes will provide greater clarity, both internally and externally, as to the way we work and, in particular, reinforce our role as micro-prudential supervisor based on a model of integrated risk analysis and integrated supervision. I believe the actions we have taken since the crisis began have shown the effectiveness of this model. This reorganisation will ensure our changing working practices and the way we make our judgements are successfully institutionalised."

Notes for editors
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.

http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/088.shtml