The introduction of the Financial Services Bill to Parliament last Friday is a significant milestone in the reform of the financial services regulatory architecture.

This briefing highlights the key differences between this Bill, and the draft Bill published in June 2011 (covered in our earlier briefing).
 

Key differences

  • FPC must maintain a written policy on the exercise of its power of direction in relation to each macro-prudential measure
  • Treasury will have a power to direct the Bank to provide financial assistance, or to use its stabilisation or bank administration powers
  • PRA veto has been extended so that the PRA can require the FCA not to use its insolvency powers in respect of a PRA-authorised person
  • PRA will have a specific duty to supervise firms
  • Government will review and, if necessary, consult on any proposed changes to the threshold conditions; the Bill empowers the FCA and PRA to make "threshold condition codes" which will be binding on firms
  • Proposed amendments to the "with-profits" regime may have some unintended implications
  • FCA's strategic objective is now "to ensure that the relevant markets function well"
  • FCA will have an operational objective to promote effective competition in the interests of consumers
  • FCA will have the power to appoint skilled persons itself, and to charge the expense to firms (or individuals); it will not however be able to order issuers, sponsors or primary information providers to commission skilled persons' reports.
  • Consumer bodies will be able to make super-complaints, and the FOS and regulated persons will be able to make referrals, to the FCA
  • There will be a single complaints commissioner and process for FCA and PRA
  • Regulators' powers in relation to holding companies (including unregulated holding companies) have been strengthened
  • FCA will be given a basis in which to distinguish between retail and wholesale consumers
  • More detailed proposals for coordination on regulatory processes, enforcement and legal intervention are set out in the draft MoU between PRA and FCA

Click here for our briefing on the Joint Committee's report on its examination of the Financial Services Bill 2010

Click here for our briefing on the Treasury Select Committee's report on the FCA

Article tags

financial services bill

Related categories

UK

Key contacts

Karen Anderson photo

Karen Anderson

Consultant, London

View profile
Susannah Cogman photo

Susannah Cogman

Partner, London

View profile
Elizabeth Head photo

Elizabeth Head

Of Counsel, London

View profile
Clive Cunningham photo

Clive Cunningham

Consultant, London

View profile
Marina Reason photo

Marina Reason

Partner, London

View profile
Kelesi Blundell photo

Kelesi Blundell

Partner, London

View profile
Hywel Jenkins photo

Hywel Jenkins

Partner, London

View profile
Chris Ninan photo

Chris Ninan

Partner, London

View profile
Jon Ford photo

Jon Ford

Partner, London

View profile
Simone Hui photo

Simone Hui

Of Counsel, Hong Kong

View profile
Chee Hian Kwah photo

Chee Hian Kwah

Director, Prolegis LLC, Singapore

View profile
Valerie Tao photo

Valerie Tao

Knowledge Lawyer, Hong Kong

View profile
Cat Dankos photo

Cat Dankos

Senior Regulatory Consultant, London

View profile

Disclaimer

The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.