Financial Services Act 2012
Financial Services Act 2012 came into force from 1 April 2013. It is part of the strengthening of the financial regulatory structure in the UK. The legislation delivers significant reform of the current regulatory system. The headline statement was the division of responsibility for financial stability between the Treasury, the Bank of England and the Financial Services Authority (FSA). However, there are and there will be a number of changes.
- Proposed transfer for the responsibility for mutuals. Currently the FSA has responsibilities for mutuals (building societies, credit unions, friendly societies, and industrial and provident societies). A draft Order has been prepared that proposes to transfer the function to the Prudential Regulation Authority (PRA) and the Financial Cionduct Authority (FCA)
- Insertion of four new Parts into Schedule 6 of Financial Services and Markets Act 2000 (FSMA). The four parts cover:
• conditions for firms authorized and regulated by the FCA.
• FCA-specific conditions for firms authorized by the PRA and subject to dual-regulation.
• PRA-specific conditions for insurance firms authorized by the PRA and subject to dual-regulation.
• PRA-specific conditions for non-insurance firms authorized by the PRA and subject to dual-regulation.
- A new requirement for those responsible for managing the affairs of a firm to act with probity, in order to satisfy the regulators that the firm is fit and proper. It is stated by HMT that “The regulators can take actions against the firm including imposing requirements on the firm to take certain steps, and where necessary the regulator can consider the removal of permissions held by the firm. Regulatory action can also be taken against a manager or director via other means, for example through the Approved Persons Regime”
- The transfer of Consumer Credit regulation to the FCA. A consultation has been issued on this proposed transfer