FSA agrees to "cooling off rules"

11.22.00pm BST (GMT +0100) Thu 22nd Apr 2004

Norman Lamb has successfully campaigned for Financial Services Authority (FSA) executives to operate within similar "cooling off rules" as senior civil servants.

Norman Lamb wrote to the FSA calling for a rules review at the end of 2003 after Carol Sergeant, the FSA's managing director of risk and regulatory processes, took a job as chief risk officer at Lloyds TSB. The FSA had investigated Lloyds TSB earlier in the year, although Ms Sergeant stepped down from the investigation at the time to avoid a conflict of interest. The FSA investigation resulted in Lloyds TSB paying a £2.9m fine.

In response to Norman Lamb's correspondence, the FSA has announced a 3 month minimum restriction period for the 3 managing directors, the Chairman and the Chief Executive should they take up a position with a regulated firm or UK listed company. This "cooling off" period may be increased to 6 months maximum.

"I'm very pleased the FSA have conceded new restrictions needed to be introduced," commented Norman Lamb. "It makes sense that senior FSA personnel are subject to a "cooling off" period when moving jobs similar to senior civil servants. Maintaining the FSA's reputation as an independent regulatory body is vital; any suggestion of a conflict of interest could throw significant doubt on the objectivity of the FSA team."