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Overall recommendation
We have examined the proposal for the Regulatory Reform (Financial Services and Markets Act 2000) Order 2007 (the "draft Order") in accordance with Standing Order No. 141. We recommend unanimously that a draft Order in the form of the proposal should be laid before the House.
Outline of the proposed Order
The Financial Services and Markets Act 2000 implemented a new regime for the regulation of financial services and markets, including the establishment of the Financial Services Authority as the sole, independent regulator. In 2003/4, HM Treasury undertook a two year review of the new regime, as a result of which a number of areas in need of reform were identified. The purpose of the proposed Order presented pursuant to the Regulatory Reform Act 2001 (RRA) is to reform wholesale and retail financial markets as part of a ten-point action plan of reforms set out in the Government's Pre-Budget Report 2005. The Government intends that the proposed Order will deal with a series of burdens and restrictions contained in the Financial Services and Markets Act 2000, resulting in a more streamlined approach to regulation.
The proposal for the draft Regulatory Reform (Financial Services and Markets Act 2000) Order was laid before the House by HM Treasury on 18 December 2006. We have considered the proposal against the criteria set out in paragraph (6) of Standing Order No. 141 and report the following conclusions to the House.
Criterion (a): appropriate for delegated legislation
In our view the proposal appears to be appropriate for delegated legislation.
Criterion (b): removal or reduction of burdens
The proposal would remove or reduce a number of burdens.
Criterion (c): maintenance of necessary protection
We are satisfied that no necessary protection would be lost.
Criterion (d): adequate consultation
We consider the proposal has been the subject of, and appropriate account has been taken of, an adequate degree of consultation.
Criterion (e): charges on public revenues, payments to the Exchequer or any public authority
The proposal would not impose any requirements of this kind.
Criterion (f): retrospective effect
The proposal would not have retrospective effect.
Criterion (g): vires of the proposal
The proposal gives rise to no doubts as to whether it is intra vires.
Criterion (h): requires elucidation, is not written in plain English or appears to be defectively drafted
We do not consider the proposal gives rise to any concerns of this kind.
Criterion (i): compatibility with membership of the European Union
We have seen no reason to consider that the proposal is incompatible with obligations arising from membership of the European Union.
Criterion (j): prevention of the exercise of rights and freedoms it would be reasonable to expect to continue
We consider that the proposal would not prevent the exercise of any right or freedom that any person could reasonably expect to continue to enjoy.
Criterion (k): new and re-enacted burdens are proportionate to the benefit which arises from them
We consider the new burdens imposed by the proposal would be proportionate to the beneficial effects which would arise from them.
Criterion (l): extent to which the Order removes burdens or has other beneficial effects makes it desirable for it to be made
We consider the proposal meets the test of desirability in its removal and reduction of burdens.
Criterion (m): estimates of increases or reductions in costs or other benefits and the account taken of them
We consider the Department has made reasonable efforts to foresee the costs, savings and other benefits that could arise from the proposal.
Criterion (n): subordinate provisions
The proposal contains no provisions which are designated as subordinate provisions.
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