Corporate Governance

The FSA and the Retreat from Regulation Lite

By J. Robert Brown

We have noted from time to time the difference in the regulatory approach between the US and the UK.  The UK relies on a "regulation lite" approach, with the Financial Services Authority (the British SEC equivalent) taking a less aggressive hand in the area of enforcement.  It is one of the reasons that explains the success of Alternative Investment Market or AIM. 

It is with interest, therefore, that we note the continued movement away from "regulation lite."  The WSJ reported that the FSA is becoming more aggressive in policing insider trading and will seek stiffer penalties, including jail time.   In a speech by the FSA's head of enforcement, Margaret Cole, she noted that "U.S. style punishment like jail time is a more powerful deterrent."  So is an increased level of enforcement.

Full post as published by The Race to the Bottom on September 03, 2008 (boomark / email).