FSA is consulting on the detailed Handbook provisions that will support the secondary legislation Treasury will need to make to transition to the new regulatory structure. Although Treasury has not yet made the Orders, FSA has liaised with it on its own proposals. The paper covers the following:
- General transitional provisions: FSA proposes that, in principle, actions started before legal cut-over (LCO) will remain effective after the PRA and FCA Handbooks come into force. Any time periods running before LCO will carry over to the new regime. FSA says it will respond shortly on the transitional period for status disclosure on which it has already consulted.
- Transitional provisions for approved persons, including the members of a with-profits committee: FSA has confirmed its intention to grandfather existing approvals into the appropriate regulatory regime. For FCA-regulated firms, this will be easy, as the controlled functions will remain as the current FSA controlled functions (except that the actuarial functions will not be required). For dual-regulated firms, each approval will be deemed to have been given by the appropriate regulator post-LCO. The regime will also transition current function holders into any additional functions created by the LCO process. FSA has also now confirmed that members of with-profits committees will be part of the PRA non-executive director function and will be transitioned in this capacity.
- The proposed deletion of some current Handbook provisions: FSA says that certain parts of the Perimeter Guidance and the Disclosure and Transparency Rules will no longer be required. There are also a few redundant provisions in other parts of the Handbook. More fundamentally, FSA proposes to delete each Schedule 4 from the Handbook. These Schedules show the source of the rules with reference to FSMA, but FSA does not have the resource to update these. It said it could reinstate them after LCO if it would be useful. FSA also plans to amend Chapter 21 of the Supervision Manual in respect of a waiver FCA will give to energy market participants, and to make changes necessary to address actions for damages under the PRA Handbook.
It asks for comments by 25 February. (Source: Regulatory Reform: CP13/3*)