Thank you Chairman; Good morning ladies & gentlemen

After such an impressive line up of speakers I feel as Ronnie Corbett must have done, when standing in that famous line-up with Ronnie Barker and John Cleeves, when he expressed his feeling of inferiority because he was having to look up to the others.

However whatever the Smaller Businesses Practitioner Panel may lack, in terms of the size of the individual businesses whose interests it seeks to promote, it more than justifies its place, within the family of Panels, as (I am told) some 93% of all regulated firms – that is some 19,000, businesses – fall within the FSA’s definition of a smaller firm.

Our Annual Report, with all the other information appears, in your pack so I have no wish to repeat information that is already in front of you; but rather to use the limited time available to highlight the main strategic smaller firm issues towards which the Panel is currently focussing a great deal of its efforts.

Successive governments, and now Europe, increasingly recognise the enormous value of small businesses to the success of the economy as major providers of goods, services, employment and revenue.

Yet despite, these encouraging expressions of support, the reality is that the burden and cost of the ever-increasing bureaucracy, placed upon smaller businesses, is now achieving exactly the opposite result of the stated intention.

It is therefore not surprising that the SBPP dedicates a considerable amount of its time on two major issues – the burden of regulation and the cost of regulation.

For a high percentage of smaller regulated firms the impact upon their ability to trade efficiently is greatly hampered by what many perceive as disproportionately high levels of regulation with all its associated disciplines and costs.

Let me be absolutely clear. The SBPP totally supports high business standards, good professional behaviour and of course high levels of customer care; indeed these are the very ingredients that are essential for the survival of any smaller firm, in the financial services sector, whether or not regulation exists.


It is easily forgotten that in most small firms the person responsible for regulatory matters, is also the marketing manager, the finance director, the HR department and the key person tasked with earning the necessary revenue to pay the bills: with all this activity taking place in highly competitive and complex marketplaces.

In summary there is a world of a difference between how regulation is seen by professional regulators, often from academic, economic and legal backgrounds with no personal experience of operating a smaller business, compared to the world and market conditions in which their regulated community must operate to survive.

It is not therefore surprising that the SBPP, using its own wide experiences, actively seeks to influence the FSA and through it Europe, to understand in a better way the challenges and often unintended consequences of the many regulatory initiatives they seek to consider.

In this regard I would like to thank the FSA for so willingly agreeing to consider a number of new initiatives by which the SBPP, using its considerable pool of practical front-end experience, could possibly work more closely with the FSA, behind the scenes, to identify smaller firm issues from the conception of new regulatory initiatives; through the various consultative processes ultimately leading to their implementation. The SBPP feels that such an approach, which is entirely in accordance with its objectives, would allay much of the concern felt within the regulated community that the FSA does not understand smaller businesses.

In the eyes of the SBPP the manner in which the Small Firms and Contact Division, under the very able leadership of its Director Lesley Titcomb, is striving to assist smaller firms towards higher levels of compliance is a real success story

It is very encouraging to see the ongoing progress of providing smaller firms with an increasing range of regulatory tools such as simplified handbooks, guidance notes, regular news updates and Roadshows; and all backed up by a much more professional and customer friendly call centre. In terms of compliance, the Panel remains highly enthusiastic about the work undertaken by Lesley and her teams in respect of the Enhanced Smaller Firms Strategy, and looks forward to providing ongoing support in this significantly important area.

The Panel recognises that in certain sectors fundamental regulatory changes are necessary to create more orderly markets and to protect customers. However, in more recent times, some new initiatives have been started, which, when taken in parallel with everything else, seem ill-timed and potentially destabilising at times when many firms are already facing difficult trading conditions.

In raising this subject I refer, as examples, to the Quality of Advice Project which sits uneasily beside the more important work of the RDR. As a second example, I refer to the highly destabilising and long protracted debate on the subject of the disclosure of commission within the commercial insurance marketplace.

From the viewpoint of the FSA these issues may seem important but to smaller firms, who are already struggling to cope with the burden of regulation, they are seen as regulation for regulation sake; with the thought that the FSA’s resources could far more effectively be used elsewhere.
In this regard the Panel is taking a strong interest in the exchange of correspondence between the Practitioner Panel and the Chief Executive seeking to create a better understanding as to what regulatory issues are important and what in the current climate could more appropriately be moved towards the back burner.

My allocated time is now drawing speedily to a close so I would like to finish on a positive theme.
I know the FSA expects and respects that the SBPP would be failing in its duty if it did not openly, honestly and constructively articulate the concerns and views of smaller firms.

Equally the Panel recognises the FSA has an extremely difficult task of balancing its objectives against the expectations of its many stakeholders. It therefore greatly appreciates its open, friendly and close working relationship with the FSA and that indeed starts from the Chairman himself downwards: they may be “regulators” but believe it or not they are actually very nice individuals as well.

Thank you very much indeed.