Following a consultation issued in May 2006, HM Treasury has amended the way in which the UK Financial Services Authority (FSA) consults on and makes guidance. A Regulatory Reform Order (RRO) was laid before Parliament in May 2007 to pass the changes and the RRO took effect on July 12.
The RRO has abolished the requirements contained in the Financial Services and Markets Act 2000 for the FSA, as part of any consultation on proposed guidance, to publish: (i) a cost benefit analysis, (ii) an explanation of the guidance’s purpose, (iii) an explanation of why FSA believes the proposed guidance is compatible with their general duties, (iv) an account of representations made and any responses and (v) an account of any difference between the proposed guidance and the actual guidance made. Until the RRO, only the FSA Board could exercise the legislative function of issuing general guidance. The RRO now allows a committee or sub-committee of the FSA Board to issue general guidance.
Taken together these procedures should simplify the process of consulting on guidance and facilitate its issuance.