FSMA: Introduction

This feature article summarises some of the main changes to the UK's financial services regulatory regime.

The Treasury has published draft amendments to the Financial Services Bill 2012-13.

The Financial Services Bill was introduced to Parliament on 27 January 2012. While the basic framework of the Bill has not changed since consultation, some significant changes have been made to the government’s proposals following the pre-legislative scrutiny report by a joint committee of both Houses of Parliament, reports by the Treasury Select Committee and stakeholder feedback.

This article examines the role of competition in the new financial services regulatory regime, and the tensions that may arise in the new structure.

Ian is a partner in the Financial Services Group of Baker & McKenzie and a member of the Consultation Board of PLC Financial Services. He was previously a Head of Department in the Enforcement and Financial Crime Division of the FSA. Ian shares his views on topical financial services regulatory issues with PLC Financial Services subscribers on a regular basis. In his column for October 2010, Ian considers the new structure for UK financial services regulation and, in particular, the future of the FSA's enforcement function. Will it be transferred as a whole to the new Consumer Protection and Markets Authority (CPMA) or splintered between the CPMA and the Economic Crime Agency (ECA)?

On 26 July 2010, HM Treasury published a consultation paper providing more detail on the reforms to the UK financial services regulatory structure announced in the Chancellor of the Exchequer's Mansion House speech in June 2010. We asked leading financial services practitioners for their views on the consultation paper and the government's proposals in general: see Article, Fixing the system: analysing the UK's new financial services regulatory framework. This article sets out their comments in full. For further information on the government's proposals, see Practice note, Hot topics: New UK financial services regulatory structure.

The Financial Services Act 2010 has received Royal Assent.

On 19 November 2009, the Government introduced its Financial Services Bill (Bill) to Parliament.  The Bill includes a number of reforms aimed at strengthening financial regulation and stability, and increasing consumer rights and protections. In this article, we ask a range of leading financial services practitioners for their views on the Bill. For further information on the key provisions of the Bill, see Practice note, the Financial Services Act 2010.

A look at the advantages, practicalities and procedure of banking business transfers under FSMA 2000.

The Financial Services Authority has published special editions of "List!" which consider the new Prospectus Directive regime and good practice in handling inside information under the new rules implementing the Market Abuse Directive.

In a move that will have appeased group companies that provide insurance services within the group, the Financial Services Authority has effectively agreed to exclude group risk managers from the need to be authorised under new insurance mediation rules that come into force in January 2005.

Speaking at the FSA's Asset Management Conference on 28 September 2004, Hector Sants, Managing Director of the FSA's Wholesale and Institutional Markets Division, outlined the FSA's eight priority issues in dealing with the UK asset management sector. These are: (1) restoring confidence in the savings industry and so encouraging long term saving; (2) maintaining confidence in fund governance in respect of collective investment schemes and other collective structures including pension funds and unit linked funds; (3) continuing to work on soft commission/unbundling to help resolve the inherent conflicts of interest which exist in current arrangements; (4) ensuring that the industry is aware of the risks arising from the recent growth in outsourcing of of key functions; (5) adapting to the rapid growth in hedge funds in a way which will fulfil the FSA's consumer protection objective whilst avoiding stifling competition or restricting consumer choice; (6) continuing its work on financial promotions; (7) working to ensure a consistent approach to regulation of unit linked products and CIS products; and (8) the overhaul of the CIS sourcebook (which has been ongoing throughout the past year).

The FSA has fined Scotts Private Clients Services Ltd (Scotts) £25,000 for serious failings which led to the firm introducing US$9.7 million of investors' funds into an unauthorised and apparently unlawful investment scheme. The FSA concluded that Scotts' conduct amounted to breaches of the FSA's Principles for Business.

Date: 1 May 2004 Information The Financial Services Authority made changes to the Handbook in January 2004. Changes to the Conduct of Business Sourcebook arising out of consultation paper 171 (Conflicts of interest - Investment research and issues of securities) take effect on 1 May 2004. For more information see Legal Update, FSA Handbook Notice 29.

Date: 1 March 2004 Information The Financial Services Authority made changes to the Handbook in January and February 2004 which it published in Handbook Notices 29 and 30. Minor changes to the Listing Rules to replace references to the 1998 version of the Combined Code on Corporate Governance with references to the July 2003 version of the Code take effect from 1 March 2004, as do changes to the Money Laundering Sourcebook to reflect changes introduced by the Money Laundering Regulations 2003. For more information see Legal Updates, FSA Handbook Notice 29 and FSA Handbook Notice 30.

Date: 20 February 2004 Information The Financial Services Authority made changes to the Handbook in January 2004. Changes to the provisions in the Conduct of Business Sourcebook relating to income-producing SCARPS take effect on 20 February 2004. For more information see Legal Update FSA Handbook Notice 29.

After an extended period of preliminary consultation, the Financial Services Authority has published proposals for reforming the UK listing regime. The consultation document is fairly high level as there is still some way to go before more detailed rules are put forward: the current timetable is that draft rules will be issued in the third quarter of 2004, which will be published in final form in spring 2005, with a view to implementation in summer 2005.

The Financial Services Authority is making preliminary enquiries into an announcement by London-listed Manchester United plc, which has agreed to transfer David Beckham to Real Madrid. Meanwhile, in a wider context, lawyers and industry organisations are digesting the proposals in the European Commission's draft Transparency Directive for changes to methods of corporate disclosure.

The Financial Services Authority, the Financial Services Ombudsman Service, consumer groups such as the Consumers' Association and the media are increasingly focusing their attention on the mis-selling of financial products. The key for businesses at risk of a complaint is to assess and understand the problem at an early stage and then to forge a strategy to address the various aspects of the problem.

Date: 1 May 2003 Information The FSA has made changes to its Handbook of rules and guidance effective from 1 May 2003. The General Provisions and Glossary have been amended to extend to unauthorised persons the relief given to firms in emergencies; and the price stabilising rules in the Market Conduct Sourcebook have been amended to clarify the application of the price limits. For more information see legal update: FSA Handbook Notice 20.

Split capital investment trusts are investment companies whose share capital is divided into different classes of shares carrying different rights, risks and rewards. Share prices of some splits have fallen dramatically in the last three years because of a combination of high cross holdings and high gearings. The FSA is proposing changes to the regulatory regime and may bring some enforcement actions where rules have been breached.

The Financial Services Authority has published details of the changes made to its Handbook of Rules and Guidance in July 2002.

The Treasury has laid the Financial Services and Markets Act 2000 (Commencement of Mortgage Regulation) (Amendment) Order 2002 before Parliament and the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No 2) Order 2002 has been made.

The Financial Services Authority has published a consultation paper on the market abuse implications of pre-hedging convertible and exchangeable bond issues.

In the first of two articles on insurance, a look at the basic principles behind insurance contracts and examination of the contracts.

The Financial Services and Markets Act 2000 and much of the secondary legislation made under the Act came into force on midnight, 30th November, 2001.

In the second part of this series, this article considers new investigation and enforcement powers under the Financial Services and Markets Act 2000.

Reconciling cross-border securities disclosure requirements is one of the challenge facing multinational companies. Andrew Parnell, Jeffrey McFadden, David Lynn, David Taylor and Philip Von Hoyenberg examine the requirements in the US, UK and Germany.

This regular report focuses on the Financial Services and Markets Bill (the Bill). The Company Law Committee has examined the recent amendments to the Bill and has asked the Treasury to consider certain issues that have not been addressed.

The second of a two part article explains the implications of the Bill for specific sectors of the financial services industry.

This regular report on the issues considered by the Law Society's Company Law Committee concentrates on the Financial Services and Markets Bill.

The consultation period for the draft Financial Services and Markets Bill has been criticised as too short for such a major piece of legislation.