The Financial Services Act 2010 (the Act) received Royal Assent on 8 April 2010. The Act amends the Financial Services and Markets Act 2000 to address a number of issues that are perceived to have contributed to the financial services crisis, including:  

  • creating a new financial stability objective for the Financial Services Authority (FSA)
  • requiring the FSA to establish a new body whose function is to enhance the understanding and knowledge of members of the public of financial matters
  • permitting the UK Treasury to make regulations regarding the preparation, approval and disclosure of executives' remuneration reports
  • obliging the FSA (in consultation with the Treasury and the Bank of England) to make rules requiring authorised firms to prepare and keep up-to-date a recovery plan and a resolution plan (dealing with circumstances in which it is likely that the business will fail)
  • empowering the FSA to make rules regarding short selling (we have reported previously on the FSA's short selling disclosure obligations and its ban - since lifted - on short selling - click here to see our most recent post
  • extending the FSA's disciplinary powers
  • strengthening the FSA's power to make rules requiring authorised firms to establish a consumer redress scheme

Parliament has now been dissolved in advance of the UK general election to be held on 6 May 2010. In order to pass the bill before dissolution of Parliament, the Government had to agree to drop two of its more controversial elements. The Act does not, therefore, include the following provisions which were included in the original draft bill:

  • establishing a Council for Financial Stability
  • allowing for group representative action in the courts for people with similar claims ("class actions").

A full copy of the Act can be found by clicking here (html format) or here (pdf format).