The Financial Services Bill, which will deliver fundamental reform of financial regulation in the UK, received Royal Assent today.
The Bill, which has now become an Act of Parliament, will be known as the Financial Services Act. It sets out a clear and coherent regulatory framework, replacing the uncertainty and inadequacy of the failed Tripartite system.
The Act provides regulators with comprehensive powers to counter future risks to financial stability and to ensure that consumers are treated fairly. It takes important steps to focus the regulators on rebuilding competition in a banking sector that has become too concentrated.
The Act, which comes into force from 1 April 2013:
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gives the Bank of England responsibility for protecting and enhancing financial stability, bringing together macro and micro prudential regulation;
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abolishes the Financial Services Authority (FSA) and creates a strengthened regulatory architecture consisting of the Financial Policy Committee, the Prudential Regulation Authority and the Financial Conduct Authority; and
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empowers authorities to look beyond ‘tick-box’ compliance and fosters a regulatory culture of judgment, expertise and proactive supervision.
The Government will bring forward secondary legislation in the New Year, in advance of the launch of the new authorities legislation that will (among other things) bring LIBOR into regulation.
The Financial Secretary to the Treasury, Greg Clark, said: "The Financial Services Act replaces a regulatory structure which palpably failed when tested by crisis. It sets out a comprehensive regulatory framework designed to enhance financial stability in the future and protect consumers. It takes important steps to focus the regulators on rebuilding competition in a banking sector that has become too concentrated.
Full press notice
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