Britain's Financial Services Authority (FSA) will look at the role of its senior management and the fairness of its procedures in a review of its processes for probes and levying fines, the regulator said on Wednesday. The review, partly precipitated by an independent tribunal's criticism of the FSA's investigatory practices, will begin next week under the leadership of David Strachan, the FSA's insurance chief. The findings will be published in mid-July.
Europe's most powerful financial regulator suffered a blow to its reputation last month when the Financial Services & Markets Tribunal watered down its mis-selling charge against insurer Legal & General and chided the regulator for its "flawed" investigation.
The tribunal criticised the FSA's Regulatory Decisions Committee (RDC), which considers recommendations from the FSA's enforcement team, for not sufficiently scrutinising the FSA's probe. The FSA said it would look at the options for a fair procedure under the current system in which the RDC, which is meant to represent the public interest but whose chairman is employed by the FSA, rules on whether censure is necessary.
Legal & General had argued that the RDC was not sufficiently independent.