The
Finnacial
Services
Authority
has
published
a
consultation
paper
(for
comment
by
February
16th‡)
on a
proposed
new
framework
for
regulating
retail
banking
conduct
of
business,
especially
deposit
taking.
Currently
the
Banking
Code
Standards
Board
monitors
voluntary
"Banking
Codes"
covering
deposits,
credit,
cards
and
other
services,
but
the
FSA
considers
the
Board's
enforcement
powers
inadequate
and
is
no
longer
prepared
to
leave
the
conduct
of
deposit
taking
business
largely
to
self-regulation.**
The
FSA
therefore
proposes
the
following
framework,
with
effect
from
November
1,
2009:
Robert
Finney
of
Denton
Wilde
Sapte
says:
"This
initiative
appears
to
reflect
the
FSA's
increasing
aversion
to
self-regulation.
Influenced
in
large
part
by
recent
market
conditions,
the
FSA
is
no
longer
content
to
defer
to
the
banking
industry
itself
the
regulation
of
business
conduct
in
relation
to
deposits.
In
other
areas
of
retail
finance
(like
mortgages
and
insurance),
FSA
has
stepped
up
enforcement
in
its
Treating
Customers
Fairly
programme,
and
of
the
principle
that
customers
be
given
sufficient
information
which
is
clear,
fair
and
not
misleading.
One
could
argue
that
the
new
sourcebook
is
superfluous
because
the
FSA
can
achieve
almost
all
its
needs
just
by
applying
its
principles
to
deposit
taking...and
enforcing
them.
It's
not
obvious
that
statutory
regulation
by
the
FSA
will
bring
consumers
any
practical
benefits,
but
perhaps
it
will
increase
consumer
confidence
in
these
turbulent
times.
That
said,
none
of
the
proposed
rules
would
have
made
a
real
difference
to
the
risks
to
which
retail
depositors'
have
been
exposed
these
last
15
months."
The
financial
markets
and
regulation
group
at
Denton
Wilde
Sapte
LLP
is
well-placed
to
comment
on
these
developments.
The
group
has
extensive
retail
and
consumer
credit
advisory
capabilities,
and
was
joined
last
year
by
Jody
Whitehorn
from
the
OFT
as
well
as
three
lawyers
from
the
FSA's
enforcement
division.
Denton
Wilde
Sapte's
retail
finance
practcie
acts
for
some
of
the
biggest
names
in
retail
banking
and
credit
cards.
Clients
speaking
to
the
Chambers
UK
Guide
to
the
Legal
Profession
say
well-reputed
Robert
Finney
is "hugely
knowledgeable".
As
head
of
the
firm's
financial
markets
and
regulation
group,
he
advises
clients
on a
broad
range
of
financial
regulatory
and
compliance
issues.
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