New rules will make it harder to challenge decisions made by the Financial Services Authority and that could deter new business from coming to the island, according to a local firm.

Francesca Signorio-Hooper, a director of Rowany compliance consultancy, is urging companies to respond to a consultation that closes on July 9.

The FSA is changing the rules around tribunals. It’s said to amount to ’significant and far-reaching limitation’ of the rights of aggrieved parties.

Ms Signorio-Hooper said: ’We believe this will severely limit the ability of aggrieved parties to appeal a decision of the authority.

’We feel it is important that all regulated and designated businesses understand the potential implications of this consultation and, if they feel it is right to do so, respond to the consultation setting out any concerns or comments they may have. Time is limited.’

Rowany has alerted a string of industry bodies to the proposed changes, which it details on the company website.

The company warns: ’Currently the tribunal rules do not limit the grounds for appeal. If this proposal is brought into law, aggrieved persons will only be able to seek redress if there is an error of law or there is an error of fact.

’In our view, this is a significant limitation of the right to appeal compared to the current position.’

Currently, in addition to challenging decisions based on errors of law or fact, the industry can challenge the FSA’s justification for reaching a decision.

Rowany says: ’The right of firms to appeal regulatory decisions is central to ensuring robust decision-making and holding regulators to account in the interests of justice. Where firms are materially affected by regulatory decisions, they should have an effective right of challenge if they consider that the regulator has made a mistake or has not acted reasonably.

’Similar appeals which would be successful in competitor jurisdictions may fail at the first hurdle in the Isle of Man. Not a favourable picture if you are considering setting up a business in the Isle of Man.’

Rowany has created a pro-forma response on its website for firms that want to have their say, and states: ’It is the normal practice of the FSA to circulate consultations to industry bodies. It is our understanding that this consultation was not circulated to industry bodies in the usual way.

’The island and the FSA have a strong reputation for fair governance, and it is important this reputation is maintained. This is why we are seeking to bring this consultation to the attention of all industry bodies, regulated entities and designated businesses.’