Following the release of the FSA's new paper - 'Principles-based Regulation - Focusing on the Outcomes that Matter' - outlining its thinking on “its move towards a more-principles-based regulatory regime”, Clifford Smout, from the financial services advisory group at Deloitte, said: "The move towards principles-based regulation is central to the FSA's work, and while the paper published today is a good start, it remains a work in progress.”

“It says a lot about outcomes, but if it is results rather than processes that matter, there needs to be clarity about the results that firms should be aiming to deliver. We hope that the FSA will work closely with the industry to deliver that clarity."

"Many firms have been arguing for principles-based regulation for a long time, but the change of emphasis will take some getting used to. In particular, it will require the close involvement of senior management to deliver the required outcomes. Implementing these changes effectively will be a real challenge and, in some cases, will require a transformation of the compliance function. Companies need to be careful that they don't just read the words, think they sound good and then continue as before."