Update

UK Regulatory Reform

	FSA Consultation Process

Since the last newsletter, the Christmas break has resulted in a slowing of the flow of paper. The FOA has submitted responses to the Supplement to the Draft Code of Market Conduct (CP76), the Consultation Paper on "Investigation of Complaints Against the FSA" (CP73) and is reviewing FSA's proposals for Grandfathering Provisions and its post-N2 fee-raising Arrangements (CP79).

Each of these papers is posted on the FOA web site or, in the case of more recent responses, will be included within a few days.

So far as HM Treasury Consultation Papers on secondary legislation is concerned, the FOA is working through the City Liaison Group on matters of collective concern and the Group has already responded to a number of those Consultation Papers. In the matters of the "hedging transaction" exclusion (Article 17 of the Regulated Activities Order), for which FOA has been lobbying extensively, a further meeting is to be organised between HM Treasury officials and the FOA's Commodity Committee and Energy Market Working Group to discuss problems with the current draft. Any member with a particular interest in this area should contact Anthony Belchambers if they would like to attend the meeting.

	FSA Consultation Process (continued)

Following a meeting with David Challen, Chairman of the high-level practitioner forum, the FOA has sent out a questionnaire to member firms to ascertain whether or not the increasing amount of information which is being sought from customers and the burden of documentation is causing problems for customers of UK regulatory institutions and, if so, in what respects. It is accepted and understood that firms may not necessarily know why a customer declines to do further business with a particular firm and that there may be a variety of reasons, other than the regulatory burden, which may cause difficulties in customer relations. Even so, it would be helpful to know the extent to which customers are content with the nature and level of regulation (bearing in mind that it is with their interests at heart that it has been designed) and whether or not, in their view, the cost and burden of it is beginning to outweigh the benefit.