John Tiner

John Tiner, the current Chief Executive of the FSA, said: "We believe principles which focus on an outcome are more enduring while at the same time better foster innovation and competition. More principles based regulation is the natural next step in the evolution of our regulatory system. It will give firms more choice over how they meet our requirements bringing for many a closer fit with their business processes and more clearly placing the responsibility for key regulatory decisions at more senior levels in firms."

The FSA has been firmly pursuing a principles-based approach for a number of years now, a route that has been somewhat different from many of the European Union’s more rule-based directives such as MiFID. However, it is now agreed by many that a principles-based approach is the best way forward in making global regulation more effective and manageable for the regulated. In new areas of regulation, such as the FSA's Treating Customers Fairly Initiative, the regime has been exclusively based on principles.

The paper's release is timed to coincide with yesterday's conference at which FSA senior management, financial services leaders and other interested parties debate the challenges and opportunities presented by the moves. Callum McCarthy, Chairman of the FSA, says: "We have set ourselves and the industry on a course towards more-principles based regulation. We are pursuing this with determination, but recognise there are difficult issues as well as excellent opportunities for us as a regulator, the industry and consumers. Today's paper and conference are designed to explore those issues as we attempt to move further towards delivering a more outcome-focused regime."