Enforcement and Financial Crime

The FSA announced on 2 July 2009 a new operational structure.  Significant internal reforms at the FSA have resulted in a restructuring which spans several divisions. As part of the changes, the Authority's Enforcement and Financial Crime Divisions will merge to form one division led by the current Head of Enforcement, Margaret Cole.

The FSA hope that a more effective operating model will enhance the delivery of its credible deterrence strategy and that this particular merger will enable it to better extract the synergies between the two current divisions.

Further changes will include the integration of retail and wholesale firm supervision into one Supervision business unit. Risk Identification, Risk Management and Policy Formulation will merge to form one Risk Business Unit. The existing Financial Stability Team will become a new, enhanced division with a macroeconomic focus.   

Additionally the FSA hope that through the formation of a new international division, the Authority will be able to increase its engagement with relevant overseas forums. The Financial Capability Division will move from within the existing Retail Business Unit to become a standalone division.

Hector Sants the Authority's Chief Executive said: "These changes will provide greater clarity both internally and externally, as to the way we work and in particular reinforce our role as micro-prudential supervisor based on a model of integrated risk analysis and integrated supervision". He continues: "This reorganisation will ensure our changing working practices and the way we make our judgements are successfully institutionalised."

These changes, effective from 1 October 2009, will conclude changes to the Authority's structure made in the light of the priorities outlined in the Turner Review.

For more details see: http://www.fsa.gov.uk/pages/Library/Communication/PR/2009/088.shtml.

Sarah Wallace, Partner in IM's Regulatory & Criminal Investigations Group said 'The integration of FSA Enforcement and Financial Crime to form one division is another indicator that the FSA are committed to continue with and increase the volume of criminal and market abuse investigations.  The FSA Enforcement focus is likely to remain on insider dealing, misleading statements and practices, and criminal offences under FSMA such as breach of the general prohibition and financial promotion regime.

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