The Financial Services Authority yesterday published a consultation paper (CP12/26) on some proposed changes to the existing regulatory rules and guidance relating to approved persons. These changes are part of the creation of the new regulatory framework for financial services in the UK, to be effected by the Financial Services Bill and which will see the Prudential Regulation Authority and the Financial Conduct Authority take over the responsibilities of the FSA.
The consultation paper sets out proposed changes to the approved persons regime, to:
“make it fit for purpose for the PRA and the FCA, including amendments required as part of the creation of the PRA and FCA Handbooks. The main aspects of change are:
• a split of the current list of controlled functions for firms regulated by both the PRA and FCA (dual-regulated firms), seeking to minimise unnecessary duplication for dual-regulated firms (something required by the Bill); and
• an extension of the Statements of Principle in APER to a wider set of activities, and their application to people approved by either regulator – meaning that both regulators will have the ability to discipline certain categories of approved person”.
Summary of the new regulatory regime
The consultation paper contains this useful short summary of the new regulatory regime and the Bill:
“The Bill (and the necessary secondary legislation that will support it) provides for the creation of the new UK regulatory architecture. The Financial Policy Committee (FPC), within the Bank of England, will be responsible for protecting the stability of the financial system as a whole and for macro-prudential regulation. The new Prudential Regulation Authority (PRA), a subsidiary of the Bank of England, will prudentially supervise deposit takers, insurers and a small number of significant investment firms. The Financial Conduct Authority (FCA) will be responsible for regulating conduct in retail and wholesale markets; supervising the trading infrastructure that supports those markets; and for the prudential regulation of firms not prudentially regulated by the PRA. The Bill proposes changes to a number of existing legislative acts, most notably the Financial Services and Market Act (FSMA), the Bank of England Act 1998 and the Banking Act 2009.”
FSA press release here.
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