THE Financial Services Authority (FSA) said yesterday it would boost its 3,300 workforce by 460 as part of its bid to take a tougher approach to policing the industry.
The City watchdog said the hiring spree would mean yearly staff costs would increase by £47.7m to £350m this year, with its overall budget increasing by 10 per cent to £454.7m.
Financial services firms that require the greatest supervision will be asked to pay more in fees, although 60 per cent of firms will see a reduction in their fees, the FSA said.
The FSA said the hiring spree was to ensure it could move away from “the old reactive model” to take a front seat approach to supervising financial institutions in the UK.
Chief executive Hector Sants said: “This proactive approach to supervision requires significantly more people than the old reactive model and those individuals must be of a higher quality and supported by more sophisticated systems.”
The FSA said that during the last year, there have been three insider dealing prosecutions and a number of individuals charged with misleading the markets.
Sants said the FSA’s new proactive approach to supervision will be “inherently more confrontational and intense”.
“The key thing for the FSA is to ensure they have quality staff who have the experience of the industry. It would be dangerous for the FSA to raise expectations beyond what they can deliver,” said partner Nathan Willmott at law firm Berwin Leighton Paisner.
Further plans contained within the FSA’s report include promoting the Financial Services Bill, continuing to look at policy reform drive by the Turner Review and working on wider European Union policy agenda.
As of January 2010, total fines collected by the FSA during the year came to £30.8m, as compared to the previous year when it managed to collect £26.5m.
The FSA’s future remains uncertain ahead of the upcoming election. The Conservatives have vowed to abolish the regulator should they come into power and hand its responsibilities back to the Bank of England.