It may come as no surprise to most compliance practioners that most firms will complain about the level of requirements for firms is disproportionate to the risk posed by their existence. According to the Financial Services Practitioner Panel (FSPP) more than 80 per cent of the industry believes that to be a true and accurate situation.

The FSPP apparently questioned nearly four and a half thousand regulated firms and found that the number of advisers rating the FSA poorly for maintaining confidence in the UK financial system more than doubled from fifteen per cent in 2006 to thirty eight per cent this year.

Quite worryingly, but not surprisingly after the run on Northern Rock in 2007, sixty one per cent of firms say the FSA has focused on consumer protection to the exclusion of and possible harming of other objectives and only fifty eight per cent consider that the FSA is demonstrably alert to emerging EU issues, indicating that they are concentrating more on domestic developments.

Following the events of 2008, increasing slightly by six per cent from 2006, eighty five per cent of advisers surveyed recognised, agreed and admitted the need for strong regulation.

The FSPP also found that firms showed strong support for the Treating Customers Fairly (TCF) initiative with eighty nine per cent suggesting that they were in support of it (although no indication if these firms were already practising it). The area of concern for any Compliance Consultant in these findings would be slightly over half of those surveyed claimed that the regulator provided a clear explanation of how to implement TCF.

Although a majority of three to one showed support for More Principles Based Regulation (MPBR), just under a third believe the FSA have made it clear how more principles based regulation will work in practice and almost two thirds feel that MPBR may leave them open to retrospective regulation.

Financial Services Practitioner Panel chairman Nick Prettejohn says: "This survey gives a useful readout of the attitudes of the industry to regulation taken around the middle of 2008. Not surprisingly, there was a sharp decline in the rating given by the industry in the rating of the FSA for maintaining confidence in the financial system, although there was no change in firms' rating of the FSA's performance versus its other objectives."

FSA chief executive Hector Sants says: "The FSA recognises that our understanding of firms and their business remains the major area where we need to improve, and this has been identified as a priority for some time. We are taking significant steps to move forward with this and there are already some signs of improvement here.

"General concern among firms about the stability of the financial system has come through more prominently in the survey results than worries about increased regulation or the cost of regulation, both of which seem to have receded in relative importance."

Lee Werrell, Managing Director of CEI Compliance comments that;

"a majority of firms are understandably worried about the ongoing cost of regulation and the impact of the developments from both domestic and non-domestic events. From a consulting position it is always good news to hear that your clients are confused as to what is expected of them, but the fundamental requirement of all compliance is that it is appropriate and proportional. Due to the vast array of financial services operational models within a similarly dazzling spread of business types, one can hardly expect the FSA to come up with a prescriptive rulebook for a specific firm or even a specific sector. Interpretation and application are the responsibility of the compliance function with the approval of Senior Management. Whereas there are numerous recipes and optional ingredients, nobody is going to tell you how to cook your soup, you have to do that to your own local taste."

Secondly, Payment Protection Insurance (PPI) has been in and out of the news in the last ten years, mostly for bad news, and rarely to hear from somebody who has benefitted. However, the lucrative rewards for "adding" it to a loan for the salesperson has proven too attractive that the Competition Commission has announced a ban at point of sales and advisers and brokers.

It had been hoped by a number of advisers that they would be exempt from the Competition Commission's proposal to ban point-of-sale PPI and single-premium policies. In its most recent PPI paper, released in the first week of December, the Competition Commission has confirmed that no intermediary can sell PPI at any point in the credit sale interview. Additionally it says no intermediary can charge on a single-premium basis, or include PPI in any primary credit agreement or set up early termination fees.

As a final nail in the coffin to any person considering bending the rules, only after a credit sale can the customer buy a PPI policy from any company other than the distributor or intermediary with whom the customer arranged credit, or any company recommended by that adviser. After the sale is considered to be at least twenty four hours after the sale and then the customer can buy a PPI policy from any company or intermediary by whatever medium they choose.

Other remedies the Commission is "taking forward" include each provider offering detailed marketing material, comparative data, including penetration rates and aggregate claims ratio for each provider, and the issuance of an annual statement.

The Commission says: "We expect that our remedies will include a transition period of no more than 12 months. The Competition Commission invites further views in writing on the application of the proposed remedies package to intermediaries by 5pm on January 7, 2009."

Lee Werrell, Managing Director of CEI Compliance comments that;

"This has been a long time coming, and the public now have this additional layer of protection. As a consulting firm, we have the ideal perspective of ensuring that these processes and controls are in place and acceptable documented whenever we advise any client. Although the changes have yet to be finalised, they can be adopted for all Treating Customers Fairly reviews immediately, as TCF will be part of a firm's Arrow visit from the beginning of 2009. Final details will fine tune operating standards but firms should review their sales practices and financial promotions immediately so as not to fall foul of the changes which are likely to be announced imminently."

And for our final item of news, worthy of mentioning, when is it ok to cheat? This is a deeply moral question, and ignoring the extreme arguments of personal instinctive survival, in modern life, the only time is when you are amusing others by performing magic tricks. We all know that there is a trick, hidden items or effects that will make the "magic" work, but are still amazed and amused to see the expert conducting his business.

It is not acceptable, morally or ethically to make personal gains on the back of information you have acquired in the course of your work or other association with people whom may know. Desperation and a poor judgement spurred Mr Stewart McKegg and Mr Brian Valentine Taylor to make dealings with insider information and the result was that they were fined £14,411.25 and £4,642.50 respectively on the grounds of market abuse.

In both cases this was the disgorgement of profits made on transactions where they had inside information. The FSA said "If it were not for their financial circumstances both would have been fined an additional £20,000.

"Both committed market abuse by selling some or all of their existing shareholding prior to the public announcement of the placement. They both then rebuilt their position in Amerisur stock by subscribing for discounted shares in the placing.

FSA´s enforcement division head of wholesale Tracey McDermott says: "Mr Taylor and Mr McKegg were given privileged access to information about the placing because they already held shares in the company. They took advantage of that information by selling existing shares, despite knowing that they must not do so. They made a profit from other, unwitting, shareholders who did not have that information."

Lee Werrell, Managing Director of CEI Compliance comments that;

"This abuse of trust and position is something we must be constantly vigilant for in all areas of Compliance and Operational Risk. Fraud, Market abuse, misappropriation of assets, tax evasion, intentional mismarking of positions, bribery, theft of information, hacking damage, third-party theft and forgery in any form is a crime against all of us. It is interesting that the FSA have taken their personal financial situations into account and removed the £20,000 penalty from the fines; could this be sending out the wrong signal to would be insider traders?

A Compliance professional should never be afraid to question any behaviour or challenge the status quo as understanding the intricacies of their own operation makes for a better working relationship, as well as ensures that a certain level of satisfaction and assurance is gleaned from the satisfactory answers."