Norton Rose assists FSA with Baird report

Norton Rose has helped the Financial Services Authority (FSA) publish the Baird report, a review of the regulator's conduct in the Equitable Life affair.
The firm was appointed by the regulator last December to give a full account of the FSA's regulation of Equitable. PricewaterhouseCoopers wor-ked on the actuarial side.
Norton Rose partners James Bagge and Charles Evans, assisted by Katie Stephen, Harriet Levy and Timara Kay, worked full time on the investigation for seven months, completing its work in July this year before the review's publication in October.
Norton Rose advised Ronnie Baird, the FSA's director of quality assurance and internal audit, on the review, and was instructed by FSA general counsel Andrew Whittaker. Bagge is on his lawyers consultation panel, which meets over lunch to mull over financial services regulatory issues. Other law firms involved with the panel are Linklaters & Alliance, Slaughter and May, Fresh-fields Bruckhaus Deringer, Clifford Chance and Simmons & Simmons.
According to Whittaker, Norton Rose's past work for the Government was the key factor in the regulator's decision to instruct the firm.
Whittaker said: "The board were keen to ensure independent external support for the review team, which needed to start work early in the New Year, and Norton Rose were chosen on the basis of their unique past experience in a similar role in the Barings case."
The firm was instructed by the Board of Banking Supervision following the collapse of Barings Bank in 1995.
Before preparing its submissions for the Baird report, Norton Rose pulled in and analysed all the relevant documents and then interviewed around 40 key individuals. The regulator's final report was made public at the end of last month. Chapters 6 and 7 detailed the FSA's failings in dealing with Equitable and set out recommendations for future FSA conduct.
The report was broadly critical of the FSA's handling of the Equitable affair, although it did qualify this by saying that "the die was cast" by the time the FSA took over as regulator for the insurance industry at the beginning of 1999.
One of the key failings identified was the "poor level of communication and coordination" between the various departments of the FSA responsible for insurance regulation. The report recommended that the regulator make more effort to "develop internal awareness between the teams" and to adopt a "more proactive, risk-based approach" to regulation.
Bagge said of the report: "The FSA demonstrated a lot of corporate self-confidence in commissioning it, as the Board of Banking Super-vision did in the Barings case.
"It has succeeded in identifying the key issues and enabled itself to tackle them in a matter of months, whereas these things can often take years."
Since the publication of the report, the Parliamentary Ombudsman has decided to conduct its own independent investigation into the Equitable affair. According to Whittaker, the Baird report and Norton Rose's submissions will "no doubt be a key input to the Ombudsman".