Financial Services and Markets Appendices to the Minutes of Evidence


ANNEX 2

EXTRACT FROM "THE OPEN APPROACH TO REGULATION", JULY 1998

THE FSA'S APPROACH TO CONSULTATION

  1. The FSA is committed to carrying out its responsibilities in an open, transparent and accountable way. This statement describes the approach which we will take to consulting on our policies and plans. We will keep this approach under review, in line with evolving good consultation practice.

  2. The FSA expects the forthcoming legislation to require it to consult publicly on proposals to exercise certain of its formal powers (unless the need for urgency does not allow sufficient time) and to carry out, and publish, cost-benefit analysis of regulatory proposals. We will therefore consult on material changes in regulatory requirements, policy or procedure and on our annual plan, budget and fees. Where proposed changes arise from a requirement to comply with EC Directives, we will make this clear.

  3. We will consult in a range of ways in order to:

    —  obtain information and views to help the FSA take well-informed decisions, bearing in mind in particular the costs, benefits, and practical implications of proposed changes to regulatory requirements;

    —  receive alternative suggestions for achieving particular regulatory objectives;

    —  promote understanding of the FSA's overall objectives and the reasons for the policies and procedures it adopts;

    —  obtain feedback on the FSA's existing policies, practices and performance.

  4. Consultation will be public and will target the full range of interested parties, including:

    —  consumers, and their representative bodies;

    —  individuals, firms or groups with relevant expertise;

    —  trade associations;

    —  advisory groups established by the FSA;

    —  voluntary organisations;

    —  academics and professional training bodies;

    —  the media.

  5. The FSA will consult according to a number of general principles. It will seek to:

    —  have informal discussions at an early stage with those likely to be directly affected;

    —  consult at an early enough stage to enable it to take the responses into account;

    —  produce reasoned consultative proposals, expressed in plain concise language appropriate for the audience;

    —  include in consultation papers, and invite views on, preliminary cost-benefit information commensurate with the significance of the proposals in question;

    —  allow those consulted adequate time to respond;

    —  provide opportunities, where appropriate, for views and comments to be obtained in structured open hearing-type meetings;

    —  make all responses to formal consultation available for public inspection, unless the respondent requests otherwise;

    —  following public consultation on major policy issues, publish a reasoned explanation of our decisions.

  6. In the interests of efficiency and avoiding undue burdens on those whom it consults, the FSA's general approach to establishing advisory groups will be:

    —  to establish such groups only where there is a specific need for advice on a particular topic or area;

    —  in identifying members with appropriate expertise, to draw on suggestions from a wide range of sources, including trade associations, consumer bodies, interest groups, and by providing opportunities for self-nomination and recommendation by individuals and firms;

    —  to maintain a group only so long as is necessary for the task.


 
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