Small firms complain at FSA overhaul

The financial services industry got its biennial chance to hit back at its regulator yesterday, criticising the Financial Services Authority for the continued high cost of regulation, and for the confusion surrounding its switch to a principle-based rulebook.

Publishing its survey of regulated firms, the Financial Services Practitioner Panel revealed that satisfaction with the regulator had decreased over the two years since its last report.

Although wholesale financial services firms generally registered an overall improvement in their relations with the FSA, the consumer sector - in particular smaller companies - was finding it difficult to make the shift to principle-based regulation.

Roy Leighton, chairman of panel, said: "[The] sense of disappointment is particularly evident amongst smaller firms who continue to feel frustrated by the constant change and uncertainty created by aspects of the FSA's strategic and policy work."

Commenting on the findings, John Tiner, the FSA's chief executive, said: "Regulation is by its nature unlikely to be popular with the regulated."