The FSA has announced that HM Treasury will now be publishing a second consultation paper on the new UK financial services regulatory structure in February 2011.

This consultation is expected to include a draft of a Financial Services Regulation Bill, with a view to bringing forward the Bill in Parliament in mid-2011. The Government aims to complete the passage of the primary legislation during 2012.

HM Treasury has also recently published a speech given on 17 November 2010 by the Financial Secretary, which clarifies the future of the FSA’s function as the UK Listing Authority (“UKLA”). In its July 2010 consultation paper, HM Treasury suggested that the UKLA function could be merged with the Financial Reporting Council to form a new companies regulator. It also stated that the Government would consult on whether to transfer the FSA’s current responsibilities for prosecuting criminal offences involving insider dealing, other forms of market abuse and other criminal law breaches to a new Economic Crime Agency (“ECA”).

The Financial Secretary’s speech confirmed that, following industry responses to the earlier consultation paper, the Government has now decided to keep the UKLA in the CPMA’s Markets Division. The Government has also now decided to keep the criminal prosecution of insider dealing within the CPMA, rather than to transfer it to the proposed ECA.