Treasury has published a suite of legislation under the FS Act. All but the first instrument have been published in draft. There were no significant changes to the consultation drafts, and the instruments now published are as follows:
- The FS Act (Commencement No. 1) Order 2013: this Order was made on 23 January and is already in force for some purposes and will take effect from 19 February for others. Many parts are in force for the purpose of making orders or regulations, or for limited purposes.
The Financial Services and Markets Act 2000 (FSMA) (PRA-regulated Activities) Order 2013: this sets out which firms will be prudentially regulated by the Prudential Regulation Authority (PRA) and therefore be dual-regulated under FSMA. As expected, dual-regulated firms will be:
- those that effect and/or carry out contracts of insurance;
- investment firms that meet each of these three conditions: (i) deal as principal, (ii) have a capital requirement of €730,000 (BIPRU 730K firms) and (iii) PRA has decided it would be appropriate for the firm to be PRA-regulated. It includes passported-in firms;
- Lloyd's when arranging; and
- Lloyd's managing agents.
- The BoE Act 1998 (Macro-prudential Measures) Order 2013: this is also in draft and will take effect on 1 April 2013. It will set out the macro-prudential measures that the Financial Policy Committee can direct PRA to implement.
- The FSMA (FSCS) Order 2013: this sets out the circumstances in which PRA and FCA respectively may make compensation rules. FCA can make rules in respect of all business except that reserved to PRA. PRA business broadly mirrors the PRA-regulated activities, except all rules relating to investment firms fall under FCA’s remit.
- The FSMA (Regulated Activities) (Amendment) Order 2013: this will take effect from 2 April 2013 and would introduce the new regulated activities relating to benchmarks and an interim permission regime to go alongside them.
- The FS Act (Consequential Amendments) Order 2013: this will take effect from 1 April 2013 and would provide for changes to various piece of legislation to reflect legal cut-over.
- The Uncertificated Securities (Amendment) Regulations 2013: these will also take effect from 1 April 2013 and will amend the current (2001) regulations to transfer responsibility for the approval and regulation of operators of relevant systems from Treasury to the Bank of England. These Regulations will also provide the Bank of England with new powers to require reports to be produced by skilled persons in respect of operators of relevant systems and to appoint investigators for the purpose of making enquiries about operators of relevant systems in appropriate cases.
- The FS Act (Mutual Societies) Order 2013: this Order, also taking effect from 1 April 2013, sets out how powers of FSA transfer to the PRA and FCA under various legislation affecting mutual societies.
- The Act (Misleading Statements and Impressions) Order 2013: this Order will also take effect from 1 April 2013 and will specify relevant activities, relevant investments and relevant benchmarks for the purposes of Part 7 of the FS Act, which creates criminal offences which relate to the making of false or misleading statements, or the creation of a false or misleading impression, in connection with a relevant agreement, relevant investment or relevant benchmark. Sections 89 and 90 in part replicate the effect of section 397 of FSMA. Section 91 is new.
- The FSMA (Threshold Conditions) Order 2013: this Order will also take effect from 1 April 2013 and will amend the threshold conditions to take account of the new conditions PRA and FCA will apply.
(Source: the FS Act (Commencement No. 1) Order 2013, the FSMA (PRA-Regulated Activities) Order 2013, the BoE Act (Macro-Prudential Measures) Order 2013, the FSMA (Financial Services FSCS) Order 2013), the FSMA (Regulated Activities) (Amendment) Order 2013, the FS Act (Consequential Amendments) Order 2013, the Uncertificated Securities (Amendment) Regulations 2013, the FS Act (Mutual Societies) Order 2013, the FS Act (Misleading Statements and Impressions) Order 2013 and the FSMA (Threshold Conditions) Order 2013)