Readers of my previous blog will recall that on 12 September 2012 the FSA published consultation paper 12/24 entitled “Regulatory Reform: PRA and FCA regimes relating to aspects of authorisation and supervision” (the “Consultation Paper”). The Consultation Paper consulted on substantive proposed changes to the current FSA rules and guidance, in anticipation of the enactment of the Financial Services Bill (the “Bill”).
The Consultation Paper identified a number of substantive changes to the current FSA Handbook. Some of these proposed changes appeared relatively uncontroversial, whilst others will undoubtedly have an impact on the procedures and practices that some firms may currently adopt.
The Consultation Paper mainly addressed the following:
- Amendments to definitions;
- Changes to regulator disclosure requirements and use of the regulators’ logos (GEN 4/5);
- Changes to the Supervision Manual (SUP 5) regarding reports by Skilled Persons;
- Changes to the Supervision Manual (SUP 6 and 7) regarding applications to vary and cancel Part IV permissions and requirements; and
- Changes to the Supervision Manual (SUP 8) regarding waiver and modification of rules.
A detailed consideration of the proposed amendments set out in the Consultation Paper can be found here.
Responses to the Consultation Paper are required to be submitted to the FSA by close of play today.
A quick search of the internet finds responses to the Consultation Paper which have already been submitted by the Council of Mortgage Lenders (the “CML”) and the Building Societies Association (the “BSA”).
Generally speaking the CML and BSA responses are positive and understanding of the reasoning behind amendments to the current Handbook.
One thing they do have in common is that they both express concern over the transitional periods detailed within the Consultation Paper. For example, the FSA proposes to allow for a 6 month transitional period for firms to cease using the FSA logo once power is handed over to the new regulators. The CML and BSA both state that with all the changes which will come into effect when the Bill comes into force, a longer transitional period would be welcomed, with the CML suggesting 12 months and the BSA suggesting 9 months. Where no transitional period is detailed within the Consultation Paper, the feeling appears to be that firms would welcome as much time as possible to give effect to changes.
Both responses also express concern over the amendments to SUP5 and the costs associated with skilled person’s reports.
The key messages from these responses are that effective and early communication of new provisions and requirements to firms is vital to ensure that firms are ready for changes when the Bill comes into force and that firms should be given adequate time to ensure that they have adapted their business processes to adhere to the new requirements.