Two years after the British Government began the overhaul of its financial services sector, it is already planning a wide-ranging review of the legislation that brought it into effect. But it’s not likely to tamper with its single-regulator model.

Financial Secretary Ruth Kelly, who oversees the Financial Services Authority (FSA), says the review by the Office of Fair Trading will assess the impact of the legislation on competition in financial services. The FSA will examine ways to reduce the costs of compliance, streamline the consultation process and improve the effectiveness of consumer education.

The role of the powerful Financial Ombudsman Service (FOS) will also be examined, with some concessions on appealing FOS decisions possible. Ms Kelly says the Treasury will also propose changes to the “boundary of regulation”, particularly with regard to capital-raising from investors and, where possible, financial advice.

“The UK was the first country with a large financial services industry to set up a single regulator for the whole industry,” she said. “The regulatory framework established has been a resounding success that has proved to be a model that other countries have followed.

“The review will consider particular components of the existing framework to see if any changes should be made. While there is no intention to change the structure established by the Financial Services and Markets Act [which came into effect in November 2001], the Government will consult publicly on any proposals for legislative change.”