The Financial Services Authority has scrapped plans to outsource regulatory
monitoring of firms
conducting investment business.
The FSA said those bidding to become the new regulator for accountants
and lawyers offering
investment advice were too expensive and that it would retain the role for itself.
The FSA had received eight tenders for the role from firms as well as
the existing self regulating
institutes which prompted fears that outsourcing the role would cause massive conflicts of interests.
However a spokesman said this week the authority was convinced
any conflict could have been
overcome and that the FSA had made its decision purely on the grounds of cost.
'Once we looked at the cost evidence we felt that we could keep the work in-house,' a spokesman said.
The FSA had attempted to outsource the regulatory work in attempt to
save work but found the bids were not coming in within the margins set.Estimates
from the FSA put the work at around
£600,000 a year and, with extras, at no more than £850,000.
Among the bidders were PwC on its own and in partnership with ACCA, which also bid on its own. The Joint Monitoring Unit of the English ICA also submitted an individual bid.
Other bids came from actuarial firm Bacon and Woodrow, IFA Bankhall Investment Management, the English ICA, the Law Society of England and Wales and the Law Society of Scotland.
With the Financial Services Bill still making its way through parliament the FSA has no idea when it will have the powers to start acting as regulator. However, an FSA spokesman said the measures should be in place by the end of the year.