60/01
10 May 2001
FSA ACQUIRES RULE MAKING POWERS UNDER FSMA
In response to a Parliamentary Question, the Economic Secretary to the Treasury, Miss Melanie Johnson MP, has announced the commencement, with effect from 18 June 2001, of provisions under the Financial Services and Markets Act 2000 to make the Financial Services Authority the single financial services regulator under the Act, and to give it rule-making powers.
Commencement No 3 Order will also bring into force the equivalent provisions for other bodies exercising powers under FSMA. These include:
the independent compensation and ombudsman schemes established under FSMA: although these schemes will not acquire their full powers until N2, the Financial Ombudsman Service's power to make rules and give guidance will be commenced from 18 June;
the Designated Professional Bodies: these bodies will be given powers to make rules governing the scope of the exempt regulated activities to be carried on by their members from 18 June; and
the Director General of Fair Trading and the Competition Commission: from the same date, the DG and the Commission will be able to scrutinise the effects on competition of the FSA's rules and practices under FSMA.
Welcoming this development, Miss Johnson said:
?We continue to make good progress in implementing the Act. As from 18 June, the FSA will acquire the powers it needs to make its rules. This is a further step towards the commencement of FSMA, which will be no later than end November 2001.?
Notes for editors:
1. The Financial Services and Markets Act 2000 (FSMA) received Royal Assent on 14 June 2000
2. The coming into force of the main provisions of FSMA is known as N2.
3. On 15 March, Melanie Johnson announced the Government's aim that N2 be no later than the end of November this year (Treasury press release 33/01).
4. The Economic Secretary also announced that the FSA expected to be in a position to make the key provisions of its rule-book no later than end July (Treasury press release 33/01).
5. Consistent with this timetable, the Government intends to commence on 18 June 2001 the powers making the Financial Services Authority the single financial services regulator under FSMA.
6. Also on that date, the Government intends to commence powers giving the FSA rule-making powers under FSMA.
7. Both sets of powers will be commenced by means of Commencement No 3 Order, made under FSMA.
8. Until N2, the FSA will continue to operate in its own right and as agent of various existing regulators under existing legislation, including the Financial Services Act 1986, the Banking Act 1987, and the Insurance Companies Act 1982.
9. This and other Treasury press notices are available on this website.
10. For further information, contact Liane Farrer, Treasury Press Office, on 020 7270 5192.