This Consultation Document seeks views on the draft order relating to financial promotion to be made by the Treasury under clause 19 of the Financial Services and Markets Bill.
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The Financial Services and Markets Bill ("FSM Bill") is designed to rationalise, reform and modernise the regulatory landscape for the UK's financial services industry. It creates the Financial Services Authority ("FSA") as the UK's single statutory regulator for financial services - a modern regulator for the new millennium.
The Government's innovative new approach to financial services regulation is underpinned by a desire to ensure light touch regulation wherever possible, but protection for consumers where necessary. In seeking to deliver these objectives, the Government has shown its commitment to consulting widely, not only on the FSM Bill, but also on the key pieces of secondary legislation to be made under it.
The FSM Bill was published in draft for consultation in the Summer of 1998 and, following changes resulting from the consultation exercise and also consideration of the draft Bill by the Treasury Select Committee and a Joint Committee of the Lords and Commons, the Bill was introduced into Parliament in June 1999. One of the key pieces of secondary legislation to be made under the FSM Bill will be the order concerning exemptions from the basic prohibition on unlawful financial promotion set out in clause 19. That order is the subject of this consultation document.
The Treasury is consulting on the proposed financial promotion regime under the FSM Bill in stages. In March 1999, it published a consultation document setting out, in broad terms, the proposed approach to the draft order containing exemptions from the basic prohibition on unauthorised persons promoting financial services. A large number of constructive comments were received on the March consultation document, and the response to those comments is in two parts.
We believe that this process will enable a fully considered approach to the proposed new financial promotion regime and the exemptions from it.
The Government hopes that the Bill will complete its Parliamentary passage next Spring and that the financial promotion order will be laid before Parliament some time after that.
This consultation document is in four parts:
PART ONE contains a brief overview of the financial promotion regime under the FSM Bill and discusses clause 19 of the Bill as amended in Commons Committee in July 1999.
PART TWO provides feedback on the consultation responses received on the March 1999 consultation paper, and indicates how the Treasury is responding to these consultation responses.
PART THREE sets out a brief commentary on the draft Financial Promotion (Exemptions) Order.
PART FOUR contains the draft Financial Promotion (Exemptions) Order.
ANNEX A sets out the full text of clause 19 of the FSM Bill as amended in Commons Committee in July 1999.
ANNEX B lists organisations and individuals who responded to the March 1999 financial promotion consultation document and who did not request that their responses were kept confidential.
ANNEX C contains a draft regulatory impact assessment ("RIA") for the draft order contained at Part Four.
ANNEX D contains a table showing the destinations in the draft Order of the current financial promotion exemptions under the Financial Services Act 1986.
We would welcome comments on the proposed approach and on all of the issues raised in this consultation document, including the RIA.
The draft Order is closely related to the draft Regulated Activities Order and other statutory instruments which the Treasury published for comment in February 1999. The Treasury will continue to consider the detailed responses to that consultation exercise alongside the responses we receive on financial promotion.
Responses should be sent to the address below by 28 January 2000.
Regulatory Reform Team
H M Treasury
Parliament Street
LONDON
SW1P 3AG
fax: 0171 270 4884
Respondents should give details of any organisation whose views they represent. In addition, unless respondents indicate to the contrary, it will be assumed that they have no objection to their response being made available to the public.
Further copies of this document can be accessed on this website. Paper copies, including copies of the other Treasury consultation documents referred to, are available, free of charge, by telephoning 0171 270 4848 or 0171 270 5493.