- Home
- Budget
- Newsroom & speeches
- Economic data
- Consultations & legislation
- Independent reviews
- Financial services
-
- Financial services policy agenda
- Financial stability
- World-class financial centre
- Europe & International: the agenda for financial services
- Financial services and the consumer
- Financial sanctions
- The Financial Services Bill
- Credit easing
- Equitable Life
- Anti-money laundering & counter terrorist finance
- Infrastructure
- International issues
- Public spending & reporting
- Taxation, work and welfare
- UK economy
- About us
Financial services
The Financial Services Bill – Supplementary documents
The Financial Services Bill was introduced to parliament on 26 January 2012. The Bill will implement the Government’s commitment to strengthen the financial regulatory structure in the UK. The legislation will fundamentally reform the current regulatory system, which divides responsibility for financial stability between the Treasury, the Bank of England and the Financial Services Authority (FSA).
The new system will give the Bank of England macro-prudential responsibility for oversight of the financial system and, through a new, operationally independent subsidiary, for day-to-day prudential supervision of financial services firms managing significant balance-sheet risk. The FSA will cease to exist in its current form. A proactive new conduct of business regulator will also be created to protect consumers, promote competition and ensure integrity in markets.
To accompany introduction of the Bill the Government has committed to publishing draft Statutory Instruments (SIs), and other documentation such as memorandums of understanding (MOUs).
Draft statutory instruments
Currently the FSA has responsibilities (functions) for mutuals under separate legislation from FSMA, covering building societies, credit unions, friendly societies, and industrial and provident societies.The Government has prepared a draft Mutuals Order to transfer these functions to the PRA and the FCA, and will publish a consultation paper later this year on the policy approach and detail of the Order.
The Government is considering whether the PRA’s objectives should be applied to its functions under mutuals legislation, and will consult on this as well. The draft Mutuals Order has been published with the PRA objective applied for illustration.
- Draft Statutory Instruments: The Financial Services Act 201 (Mutual Societies) Order 201 (PDF 315KB)
The Government is publishing a draft order which would be made under s22A of the draft Bill – designating activities for regulation by the PRA – at introduction. This fulfils the PLS Committee’s recommendation that “given that the initial designation of PRA regulated activities is a key factor in understanding the intentions and scope of the Bill, a draft of the Order must be available when the Bill is introduced into parliament.”
The draft Orders will be subject to Parliamentary scrutiny alongside the Bill.
Other documentation
A Memorandum of Understanding on crisis management provides detail of the arrangements the Treasury and Bank of England will put in place to manage potential financial crises.
A Memorandum of Understanding on international organisations provides detail of the arrangements the Treasury and the regulatory authorities will put in place to ensure that engagement with international organisations is coordinated effectively.
Both of these documents can be found as Annexes of the Government’s paper 'A new approach to financial regulation: securing stability, protecting consumers'.
PRA’s engagement with the industry and consumers
As set out in the document A new approach to financial regulation securing stability, protecting consumers and in line with the recommendation by the Joint Committee, the Government has asked the Bank and FSA to publish details of the PRA’s proposed consultation arrangements for consideration alongside scrutiny of the Bill in Parliament.
Further information on the reforms can be found in the Financial Services Bill section of this website.
The Bank of England and FSA have published a draft Memorandum of Understanding which provides important additional detail about how the regulators will coordinate their activities so that they both can achieve their distinct objectives. The Memorandum of Understanding gives reassurance to firms that the new regulators will set up efficient processes to manage the input of both authorities where it is required, and will work together to minimise any unnecessary duplication.
You can find further information on either of the following external websites (both will open in a new window):
Share
Financial services sectors
