The Financial Service's Authority's review to determine whether banks have mis-sold interest rate swap agreements to UK businesses would benefit from an appeals process.
The managing director of FSA-authorised Vedanta Hedging told IBTimes UK in a film Q&A that the newly established Financial Conduct Authority (FCA) should install an appeals process because the current review could reduce the legal options of SME victims of mis-selling.
"The FSA could put some sort of appeals process in place by sitting on some sort of appeals panel while having the work carried out by independent reviewers. This could be done quickly and would not be that expensive," said Abhishek Sachdev.
In the UK, some 40,000 IRSAs have been sold and the banks have agreed with the regulator to investigate each case under an independent reviewer appointed by the bank.
If mis-selling is proved, the bank decides on the amount of compensation to be paid out.
The new dual financial regulatory regime started on 1 April with the FSA split into the Prudential Regulation Authority (PRA) and the FCA.
The PRA will be an operationally independent subsidiary of the Bank of England and will focus on supervision of financial institutions that manage significant risks.
The FCA will have responsibility for consumer issues and conduct of business regulation, and will supervise all financial services institutions, meaning that some firms will be dual regulated.
The FCA will also be responsible for the supervision of the FSA review on interest rate hedging products.
For the full interview, check out IBTimes TV or the video on this page.