The main provisions of the Financial Services Act 2012 (Act) came into force on 1 April 2013. The Act changes the way in which the UK’s financial services and markets are regulated.
The much criticised Financial Services Authority has ceased to exist, and has been replaced by the Financial Conduct Authority, the Prudential Regulation Authority and the Financial Policy Committee.
The Financial Conduct Authority is responsible for supervising the conduct of firms authorised under the Financial Services and Markets Act 2000. It is also responsible for the regulation of conduct in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets and the prudential regulation of firms not regulated by the Prudential Regulation Authority. It will regulate and supervise approximately 26,000 firms.
The Prudential Regulation Authority is a subsidiary of the Bank of England. It is responsible for the micro-prudential regulation and supervision of systemically important firms, including banks, building societies, credit unions, insurers and major investment firms. It will regulate and supervise approximately 1,700 firms.
The Financial Policy Committee is a committee of the Bank of England. Its primary objectives are to promote the financial stability of the UK’s financial system and to support the economic policy of the government. The Financial Policy Committee does not have a direct regulatory function, but has the power to give directions and make recommendations to the Prudential Regulatory Authority and the Financial Conduct Authority in furtherance of its objectives.
To give effect to the above changes, the Financial Services and Markets Act 2000, the Bank of England Act 1998, the Banking Act 2009, the Companies Act 2006 and related secondary legislation were all amended.
A list of useful links relating to the changes are provided below:
Financial Conduct Authority:
Prudential Regulation Authority:
Financial Conduct Authority and Prudential Regulation Authority Handbooks:
Financial Policy Committee:
Primary and Secondary Legislation
- Financial Services Act 2012
- Explanatory Notes to the Financial Services Act 2012
- UK Statutory Instruments