FSA calls for law firm secondees as City shake-up moves forward

The Financial Services Authority (FSA) is aiming to attract more secondees from law firms to assist in its dismantling following last month's announcement that the UK's system of financial regulation is to be overhauled.

The secondees will assist the FSA's general counsel division in dividing up the City watchdog to form the separate regulators - the Prudential Regulation Authority (PRA) and the Consumer Protection and Markets Authority (CPMA) - at the heart of the new regulatory framework.

It is standard practice for the 70-lawyer strong FSA general counsel division to operate with significant secondee support; around seven lawyers are usually on secondment. That figure will rise this autumn when steps to create an interim structure begin prior to the formal transfer of the FSA's power to the PRA and CPMA in mid-2012.

The majority of secondees are likely to be drawn from the FSA's panel of law firms, which include Norton Rose and Ashurst, although non-panel firms will also be encouraged to put forward applicants.

Norton Rose partner and former head of European law at the FSA Jonathan Herbst commented: "This seems like a sensible idea and recalls the moves to bring in more secondees during the period around the FSA's creation in 1997."

The uncertainty about the FSA's future has coincided with a number of senior-level departures from the organisation, including head of supervisory John Pain and head of risk Sally Dewar. On Monday (26 July) Treasury minister Mark Hoban launched a three-month consultation on the Government's plan to overhaul financial regulation.

Click here for Legal Week's in depth financial regulation feature.

Related briefings:

• A new approach to financial regulation - the Government's consultation on reform
• Replacing the FSA: the Government's proposals