HM Treasury has published a consultation inviting comments on the secondary legislation measures in relation to the Financial Services Bill 2012-13 (FS Bill). The proposed measures relate to a number of aspects of the FS Bill including threshold conditions, regulation of mutual societies and rule-making for the Financial Services Compensation Scheme (FSCS).
A revised version of the Financial Services and Markets Act 2000 (Threshold Conditions) Order 2013 will introduce new threshold conditions relevant to one or both of the Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA). These new threshold conditions include a new threshold condition requiring business to be conducted in a prudent manner, with regard to the firm's resolvability and the quality and quantity of the financial resources available to it. The FCA will also have a new threshold condition in relation to the suitability of a firm's business model.
In relation to mutual societies, it is proposed that the PRA's general and insurance objectives apply its functions under mutuals legislation, but not the FCA's objectives. It is also proposed to split the rule-making responsibility for the FSCS between the PRA and the FCA. Such a split would follow the division of regulatory responsibility between the two regulators as closely as possible.
Comments on these proposals (and the others included in the paper) are welcome until 24 December 2012. The final proposed secondary legislation will be submitted to Parliament as early as possible in the new year. The FS Bill is expected to receive Royal Assent in early 2013.