The custom-designed Mer system will replace a diverse mixture of IT systems that the FSA inherited from its various predecessor regulators.
It is expected to increase efficiency within the FSA by substantially reducing paperwork and clerical processing.
The FSA said the new system, scheduled for implementation from July 2008, will ease the regulatory burden on the financial services industry by making regulatory reporting simpler and easier.
It will also tighten compliance by improving the accuracy, consistency and availability of information within the FSA.
The system will enable the organisation and every business it regulates to operate against a clear, consolidated reporting schedule, removing much of the complexity that currently exists.
It will also provide the flexibility to more easily amend the reporting required as new legislation takes effect, or the scope of the FSA's activities changes.
The project is the first major piece of work to be contracted under a long-term application delivery framework signed between the FSA and Capgemini in July 2006.
Graeme Ashley Fenn, director of contact, revenue and information management at the FSA, said, "The Mer system is of fundamental importance as the FSA delivers against its promises to the industry. We are looking forward to building a world-leading regulatory reporting solution."
About 80% of 60-strong Capgemini project team will be based at the Capgemini Application Development Centre in Mumbai, India.