UK accountancy firms have raised concerns for UK companies and London's position as a global financial centre, following proposals by the financial regulator to strengthen liquidity standards. Acting on recommendations established in the Turner review, the Financial Services Authority has become the first regulator to incorporate this guidance and issue new proposals on liquidity risks. But accountants are worried that the nature of the FSA proposals are unusual in that it is not an international body, and UK firms with an international presence may be subject to various liquidity rules in other countries, causing increased complexity in financial reports 'Usually major regulatory change of this type is developed by an international body, then rolled out in individual countries,' said Vishal Vedi, a partner at Deloitte. 'It is unusual for a single regulator such as the FSA to instigate the process on its own accord.' In its consultation paper entitled CP08/22: Strengthening Liquidity Standards the FSA defends its approach stating: 'Our proposals are far-reaching and robust; many institutions will need to significantly reshape their business model over the next few years as a resultWe make no apology for tough prudential standards'. Under FSA proposals, the scope of legislation is far broader than previously, and would include fully regulated investment firms and the branches and subsidiaries of overseas groups. Small and medium-sized firms would particularly suffer from the added costs and complexity of the shift in legislation. 'The downside of the proposals is that they are quite onerous and are a big change from the previous approach,' said Christopher Hall of consultancy Risk Advisors. The move comes at the same time that convergence is being sought for International Financial Reporting Standards in a bid to deliver consistent regulation for the global financial system.