28 November 2016

FEE´s response to PIOB on its 2017- 2019 strategy

In accordance with FEE´s opinion, the Public Interest Oversight Board (PIOB) and the IFAC Monitoring Group should align and present together their suggestions for potential reform. An oversight body should not be directly involved in the standard setting itself.

In FEE´s consultation response to the 2017/ 2019 PIOB strategy, FEE proposes three 'pillars' in standard setting:

• the preparation of the standards by individuals with technical expertise
• the supervision of the standard setting process in the public interest by a public oversight body composed of a wide range of stakeholders
• the creation of Standard Setting Boards of ’mixed’ composition which direct, review, and improve the technical work and which decide on the new standards. FEE shares concerns on the perceived lack of independence and perceived lack of transparency regarding the current nomination and selection process of members of the Standard Setting Boards.

FEE has concluded that the roles and remits of the PIOB and the Monitoring Group are not clear. An oversight body should not directly be involved in the standard setting itself, the latter should be independent of the supervision of the standard setting process. The expected role of an oversight body should be to oversee the setting of standards in the public interest. The public interest at large should be represented by a wide range of stakeholders, of which regulators are just one. An over-focus on regulators should be avoided to produce standards which are not merely compliance-oriented or to be applied in a “tick-the-box” fashion without taking into account the fundamental principles, the overall objectives and the use of judgement associated with standards.

Furthermore, as far as the composition of the Standard Setting Boards is concerned, the more the standards require a high level of technical expertise, the more the representation from those who have this expertise and that apply it is required. Practitioners should therefore continue to play a key role in standard setting. As far as the selection and nomination of members of the Standard Setting Boards is concerned, FEE shares the concerns on both the perceived lack of independence of and perceived lack of transparency regarding the current nomination process. FEE is working on a project and plans to suggest potential alternative solutions at a later stage. All nominations should be based on clear and transparent selection criteria.

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