Introduction
1. The proposal for the Order was laid before the
House by HM Treasury on 18 December 2006.
2. The Financial Services and Markets Act 2000 (FSMA)
established a single regulatory framework for financial services
and markets. The Financial Services Authority (FSA) was established
as the sole, independent regulator and supervisor of the financial
sector. The FSMA confers broad regulatory powers on the FSA, but
also provides that the FSA is bound by certain duties, must meet
defined regulatory objectives and must have regard to statutory
principles set out in the FSMA when discharging its general functions.
3. HM Treasury undertook a two-year review of the
new FSMA regime in 2003/4, as a result of which various concerns
of the financial services industry emerged, including complaints
about unnecessary burdens placed on the industry by the FSA and
concerns about restrictions on the FSA's use of waivers and modifications
to rules. The Economic Secretary to the Treasury ("the Minister")
states that this proposed Order forms part of a ten-point action
plan of reforms to wholesale and retail financial markets set
out in the Government's Pre-Budget Report 2005.[1]
4. The proposed Order would remove or reduce burdens
in the following areas:
- authorisation requirements
in relation to partnerships whose members change [Article 3]
- unnecessary consultation between the FSA and
regulators in other countries in the European Economic Area [Article
4]
- obligations on the FSA to fulfil a number of
procedural requirements associated with discontinuing or suspending
the listing of a security [Article 5-7 and 11]
- requirement on the FSA to issue a warning notice
in cases where the cancellation of a sponsor's approval has been
requested by the sponsor himself [Article 8]
- the FSA's powers to waive or modify any (as opposed
to some) of its rules in respect of authorised and unauthorised
persons [Article 9]
- obligations of the FSA when consulting on guidance
[Article 1] and
- power of the FSA board to delegate the issuing
of guidance [Article 12]
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