UK - Leaders of the UK T-Charter group, which is working to create a common set of standards in the transition management industry, have met with the Financial Services Authority (FSA) to discuss if the industry initiative could come under the regulator's remit.
The T-Charter has the potential to be included under the regulator’s industry guidance rules, which aim to recognise industry codes as a basis for good practice in meeting regulatory requirements. A discussion paper on industry guidance was launched in November 2006.
Graham Dixon, managing director and head of European transition services at Credit Suisse, confirmed to Global Pensions that he had met with the FSA on the matter, but said that in his view the T-Charter was unlikely to be one of the first industry codes to seek industry guidance status. "I think the sentiment amongst managers is that they believe the way to go is to seek FSA confirmation and table the T-Charter as industry guidance," he said. He explained there was little appetite for this to happen immediately because of the pressures surrounding forthcoming regulatory changes, such as MiFID.
Meanwhile, one manager involved in the discussions, who asked not to be named, said there was concern that involving the FSA would mean a significant re-writing of the rules, either substantially changing the spirit of the charter or seriously delaying it.
Overall, the sentiment amongst managers who spoke to Global Pensions was that the main priority should be the reaching of a final agreement between managers for the T-Charter itself.
One consultant commented: “While FSA participation might reassure some clients and give the T-Charter more teeth, I would hope this does not end up delaying it.”
When the initiative was launched in November 2006, FSA general counsel Andrew Whittaker said: “These proposals will contribute towards more principles-based regulation by allowing us to focus on the main principles to be achieved, rather than the detail of how to comply with them.
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