Terms of Reference

1. To consider from a small business perspective, and to advise the FSA, on the cost and practicability implications for small businesses of:
   • the overall impact of regulation and its potentially disproportionate impact on small businesses;
   • the implementation and development of the FSA Handbook of rules and guidance, and proposals for changes to rules and guidance;
   • proposals contained in FSA consultation and discussion papers; the FSA’s implementation and continuing development of its policy and procedures in the following areas:
     • authorising firms and approving employees, including grandfathering provisions
     • supervision, and the effect of the implementation of the risk assessment framework and consequent move away from front-line contact with small firms
     • enforcement and disciplinary processes the level of FSA fees and their distribution across types of firm and ‘fee blocks’, paying particular regard to the impact on small firms
     • training and competence requirements cost-benefit analysis, research and performance measurement
     • the policies and procedures for handling consumer complaints (Financial Ombudsman Service) and compensation (Financial Services Compensation Scheme) and the FSA's input to developing strategy in these areas
   • FSA's theme-related work; and
   • any other aspects of the FSA’s operations and functions which are of particular significance to small businesses.
2. To advise the FSA on emerging regulatory, consumer protection, public awareness and industry structure issues which the Panel considers to be of special significance to small businesses.
3. To consider and make recommendations on any matters referred to the Panel by the FSA, or by the Practitioner Panel or Consumer Panel.
4. To report annually to the FSA Board on the work of the Panel, and to publish a copy of that report.

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Relationships with other bodies

1. The Chairmen of the SBPP (or his Deputy, as his alternate) to attend Practitioner Panel meetings as ex-officio members and to provide the Practitioner Panel with updates on issues specifically affecting small firms as appropriate.
2. The Panel to meet informally with the Consumer Panel to discuss issues of mutual interest at least once a year.
3. The Panel to meet with the Complaints Commissioner, the Chairman of the RDC, and representatives from FOS and FSCS as necessary to discuss relevant topics.
4. Members of the Panel to keep in regular contact with their relevant trade bodies.
5. Members to communicate to the Panel relevant issues of concern from their relevant trade or professional bodies and also raise issues of concern to smaller firms with their trade or professional bodies, having regard to the confidentiality of issues raised at Panel meetings.

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Membership

1. Representatives to be drawn from small businesses from across the spectrum of activities regulated by the FSA.
2. The FSA will appoint members and seek nominations for membership from any relevant trade and professional bodies.
3. The Chairman/ Deputy Chairmen of the Panel to be selected from among its membership by the FSA, subject to the Panel’s agreement. The Chairman, and Deputy Chairmen, will normally serve a two-year term, having been a member of the Panel for at least a year before any such appointment.
4. All Panel members to serve for a three-year term (including a formal review after-year), which, at the FSA's discretion, can be renewed with the support of the Chairman/Chairmen. Shorter terms may be agreed between the FSA and individual Panel members as appropriate.
5. If Panel members wish to retire during their term, the relevant trade or professional body to be asked to put forward two names from whom a replacement can be selected by the Panel. The individual can then serve a full three-year term.
6. An appropriate senior manager (ideally, a director) shall be selected to attend Panel meetings as a matter of course, together with other members of the FSA as appropriate for particular agenda items.
7. The Panel to be supported by a Secretariat, comprising the Secretary, a member of staff providing policy support and an administrator.

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