The nature of the FSA policy of rule use: a critical overview

Abstract

The function and effectiveness of legal rules as instruments of social organisation have become an important focus of attention for those interested in financial architecture. This paper offers a critical overview of the policy of rule use of the Financial Services Authority (FSA) in the UK and considers the background of this policy, its nature and some problems pertaining to its implementation. The aim is twofold: first, to describe how current policy trends interact with and shape the FSA's policy of rule use and, secondly, to assess the impact of these trends on the effectiveness of this policy. Special attention will be given to developments such as the policy of making more intensive use of rules termed in a high level of abstractness and generality, the fostering of a discursive and participatory character of regulation, the shift towards meta‐regulation and the adoption of a risk‐based approach to regulation.

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