European Financial Directives 07
We were fascinated to learn the European Commission were busy working on their new Mortgage white paper as we speak. We have the Council of Mortgage Lenders speaking at the European Financial directives Conference and many others who may be able to reveal more. It just goes to show that European Directives are not just about MiFID as our conference on 29 March clearly demonstrates.
We are currently going through a year of unprecedented regulatory change with the implementation of MiFID and CRD and the FSA’s ambitious programme to reform the Conduct of Business rulebook and move towards principle based regulation all at the same time. In a principled based world the FSA have stated that it will be much more about the industry answering questions for themselves rather than being dictated to my a set of rules. Firms have the background and it is more about the outcomes than the means of delivery.
This is a real challenge as firms will need to think about what they are doing rather than rely on a rule. FSA say this is good as senior management take on more responsibility and rely less on compliance telling them what to do. On the other hand many firms fear a world of anything goes where ‘show me the rule’ lets them doing anything they please.
It will be interesting to see who wins the argument but with more firms being fined over breaches of principles it would be a fool hardy Chief Executive who decided that principles means any less adherence to high standards of conduct than in a rules based world. There may be some challenging conversations to be had between compliance and the business but it is hoped this will lead to better decisions more thought through, business focused and customer friendly.
FSA are moving across the whole Handbook and the Insurance Conduct of Business rules are being reviewed with a major exercise starting in the summer. The Mortgage rules will follow suit. The Complaints rules have changed to comply with MiFID and that will apply to all firms from November. Systems and Controls have also been extended and FSA plan to roll this out to all firms except insurers within the next twelve months. Typically many firms not immediately impacted may have missed these important developments but there is no doubt that change is on its way.
With so many changes going on this is why we have chosen to dedicate a whole session of our conference on managing regulatory change. There are many ways to tackle the problem and there is no simple quick fix to it all. The main thing is to be ahead of the game and have a sound policy function in compliance or excellent external back up from a good consultant who has been to Brussels and seen it coming long before others catch up in the UK. We have the Chairman of Houston Consulting moderating the first session of our conference who can provide some fascinating insights into what is coming down the track.
Of course MiFID implementation is happening all around us and getting to grips with best execution, transparency and a whole new set of MiFID led rules goes well beyond just the investment market in London and affects every firm in some shape or form. Let us not miss the opportunities in the challenge and the first place to realise that will be on 29 March an event not to be missed.