Press Association
Sunday 12th February 2012
The boss of the City watchdog has promised more action to tackle insider dealing and other manipulation after admitting market abuse in Britain's financial services sector is at an "unacceptably high level".
Hector Sants, who will step down as chief executive of the Financial Services Authority this summer, said the regulator will expand by more than 10% and hire another 460 staff for a more intrusive and interventionist role.
In an interview with the Sunday Telegraph, he said: "There is an unacceptably high level of market abuse in the UK. We need to work to reduce that."
Mr Sants added: "There's no evidence that the UK marketplace is worse than other major financial centres but I don't think that should be our benchmark.
"Our benchmark should seek to have a market that participants really believe to be clean and fair and, as a general test, I think that if you were to ask the market participants, they would share my view that there is too much market abuse."
His comments come after the FSA secured a 21-month jail term for Malcolm Calvert, a former head of market-making at Cazenove, following his conviction for insider trading in the FSA's largest prosecution to date.
The FSA, which has more than 500 people tackling enforcement and financial crime, will outline how it plans to utilise the additional staff when it presents its business strategy this week.
The expansion is being funded by a near 10% rise in regulatory fees, which will boost the FSA to a 3,700-strong staff and enable it to become much more pro-active, particularly in tackling the high-risk "culture" of the sector.
In terms of consumer protection, the FSA announced on Friday that it will vet products to ensure they are suitable before they go on sale, rather than focusing on helping consumers get redress once problems emerge.
It currently waits for clear evidence that a product has been mis-sold and consumers harmed before taking action.
