On 27 January 2012, the Government published the Financial Services Bill, which will fundamentally transform financial regulation in the United Kingdom.
The publication of the Bill follows an unprecedented period of consultation from the original White Paper, published in July 2010 (see our previous blog post here), through to the pre-legislative scrutiny stage, running from July to December 2011, which offered further opportunities for stakeholders and Parliamentarians to engage with and improve the Bill prior to its formal introduction to Parliament.
The Bill is designed to enhance financial stability and protect consumers by providing clarity of responsibility and the necessary powers to regulatory authorities. If passed, the Bill will abolish the Financial Services Authority and create a new regulatory architecture consisting of the Financial Policy Committee (a committee of the Bank of England with responsibility for macro-prudential oversight of the regulatory system), the Prudential Regulation Authority (with responsibility for prudential oversight of banks, insurers and major broker dealers) and the Financial Conduct Authority (with responsibility for market conduct). It also legislates for a new crisis management regime by providing the Chancellor with new powers over the Bank of England where public money is at risk.