FSA changes to investment business disclosure

by Gill Montia

Story link: FSA changes to investment business disclosure

The Financial Services Authority (FSA) is developing a new regime for the conduct of investment business.

Following the introduction of a “principles-based approach to disclosure” in the FSA’s Conduct of Business Sourcebook published last November, the regulator plans to introduce a single disclosure document.

The document will combine the information enclosed in the Menu and Initial Disclosure paper but should simplify investment disclosure and create a balance between a firm’s responsibility to its customers and the right to decide how the information is presented.

The FSA believes it will enable consumers to “better understand” the services being offered by advisors by a streamlining of the process.

Dan Waters, director of retail policy and themes at the FSA, says the new proposal “means focusing on outcomes that matter, rather than processes and procedures”.

Earlier this month the FSA published its 2008/09 business plan, which outlines specific FSA initiatives concerning increased supervisory oversight.

The regulator will be looking closely at liquidity, adequacy of stress testing and the general operational preparedness of a business for unexpected events.