FSA Financial Crime Project recommends new framework for FSA Supervision and Enforcement resources

FSA Solicitors

15.09.2009

The report from the FSA Scale and Impact of Financial Crime Project recommends that the FSA's supervisory and enforcement resources should be allocated where a financial crime such as fraud, money laundering or market abuse has a high impact and where the crime has a high amenability to control by the FSA.

According to the report a new 'Impact' assessment would take into account discernable market movements generated by financial crimes, the number of complaints generated about the crime and also the costs falling upon victims. The cost element incorporates not only the emotional cost of falling victim to financial crime but also the costs incurred by individuals, firms and public agencies in attempting to prevent financial crime.

The 'Amenability' assessment looks into the influence that actual or perceived regulation has upon the decision-making of potential victims, perpetrators, experienced risk professionals and of resistant persons – those who have been the target of financial crime but did not become victims. The recommendation is that the FSA carry out research in order to identify fields of regulation that are perceived to be effective and in turn to increase resources in those areas.

This new evidence based approach would prioritise supervisory and enforcement actions for those crimes that are shown by gathered data as being high on impact and also amenable to action by the FSA. Currently the way financial crime resources are allocated includes using the ‘ARROW’ system which is based on pre-existing assumptions about firms, sub-sectors, themes and processes.

Source: http://www.fsa.gov.uk/pubs/other/scale_and_impact_paper.pdf

Report entitled: FSA Scale and Impact of Financial Crime Project – Impacts of Financial Crimes and Amenability to Control by the FSA: proposed framework for generating data in a comparative manner dated August 2009.

If you have any questions regarding the issues raised in the article please contact Sarah Wallace on 0370 1500 100 or 020 7421 3883.