THE City watchdog has announced a wide-spread restructuring to enable it to cope with a massive increase in the number of firms it regulates.

The Financial Services Authority (FSA) takes over regulation of mortgage lenders next year and insurers at the beginning of 2005, more than doubling the number of firms under its jurisdiction from 12,000 to 32,000.

The restructuring will help it process day-to-day regulation business more quickly, and also marks a shift in the watchdog's focus from developing the regulatory framework to concentrating on implementing it.

FSA chief executive John Tiner said: "The new structure will enable more delegation of responsibility, speed of action and focus on the critical issues and will make it easier for firms and consumers to do business with us.

"It will also position us to effectively handle the many thousands of new regulated firms who will fall within our remit when the mortgage and general insurance regimes are introduced late next year and early in 2005 respectively."

Under the new structure, which will come into force in April next year, three new business units will be set up with responsibility for specific areas and issues.

The first unit will deal with regulatory services, and will handle the day-to-day business involved with regulation.

A second unit will have responsibility for firms which deal directly with consumers to ensure consumer issues are central to regulation.

The third unit will focus on regulating financial markets and wholesale firms, such as investment banks, which deal with other firms rather than consumers.

The change marks a shift from the current structure in which firms are grouped together according to type, rather than whether they serve consumers or other firms. The consumer division also forms a separate unit.

Under the changes a number of directors will also have responsibility for certain sectors or issues, such as financial stability and business continuity, and consumers and financial crime, across the whole FSA.

The FSA's enforcement division will also report directly to Mr Tiner as part of the regulator's aim of speeding up the time taken for enforcement decisions to be made.

Recruitment firm Saxton Bampfylde Hever is looking for three people to become the managing directors of the units, who will also sit on the FSA's board.