The Government’s flagship Financial Services Bill has become law after receiving Royal Assent on 19th December. The Bill, which will now be known as the Financial Services Act, comes into force on 1st April 2013.
The Act, which amends the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009, as well as making other provisions including around financial services and markets, will:
- abolish the FSA;
- create a new regulatory architecture consisting of the Financial Policy Committee (which will sit within the Bank of England), the Prudential Regulation Authority, and the Financial Conduct Authority;
- give the Bank of England responsibility for protecting and strengthening financial stability, bringing together macro and micro prudential regulation;
- empower authorities to look beyond “tick-box” compliance; and
- foster a regulatory culture of judgement, expertise and proactive supervision.
In 2013 we will see the introduction of secondary legislation, that will allow for the creation of the new statutory regulatory authorities. This legislation will, among other things, bring LIBOR under statutory regulation.