Treasury is consulting on a suite of secondary legislation it will need to make when the changes to the FS Bill take effect. The Government assumes the FS Bill will get Royal Assent in late 2012 or early 2013 and the new regime will take effect from 1 April 2013. The draft legislation covers:
- the scope of Prudential Regulation Authority (PRA) regulation: this is substantively unchanged from the text published on 26 January (see FReD 3 February);
- division of the threshold conditions for authorisation between PRA and Financial Conduct Authority (FCA), and the introduction of new specific conditions. These include a new PRA condition that business must be conducted in a prudent manner and a new FCA condition on business models;
- assigning all the Financial Services Authority's (FSA) current responsibilities in respect of mutuals to PRA, including making several amendments to the Building Societies and Friendly Societies Acts;
- specifying those parent undertakings in relation to which the FSMA regulators can take action;
- splitting responsibility for making Financial Services Compensation Scheme (FSCS) rules between PRA and FCA; and
- giving guidance for bodies that wish to be designated as "super-complainants" under FSMA.
Treasury asks for comments by 24 December. (Source: A New Approach to Financial Regulation: Draft Secondary Legislation)