Consultation and Legislation: Bulletin 5
FINANCIAL SERVICES AND MARKETS ACT 2000:
RECENT DEVELOPMENTS
Bulletin number five from HM Treasury
This is the fifth bulletin covering developments on the Financial Services and Markets Act 2000 (FSMA).
N2
On 15 March, in a Parliamentary debate on the Regulated Activities Order, and related legislation, the Economic Secretary, Melanie Johnson MP, announced a revised timetable for the commencement of the key provisions of the Financial Services and Markets Act 2000, known as N2. She said: -
"Good progress continues to be made on the implementation of the Financial Services and Markets Act. The seven statutory instruments we have sought Parliament's approval for, including the three under discussion today, will between them define the extent of FSA regulation, the framework for the marketing of financial services and for the provision of financial services by professional firms.
"I am now in a position to provide greater certainty on the latest date on which the main provisions of the Act will come into force, a date known as N2. In doing so I have taken into account the importance of firms and consumers enjoying the benefits of the new regulatory framework as soon as practicable, and the need to give financial services firms a reasonable time to prepare between announcing a firm date and N2.
"I can now announce our aim that N2 be no later than the end of November this year. As soon as I am in a position to announce the actual day of N2, I will do so. I should make clear that this is not an aspiration or a working assumption. Firms should prepare for N2 on this basis."
The press release announcing the target can be found on the is website . In the same debate Miss Johnson announced that the regulation by the FSA of mortgages is expected to begin nine months after N2, that the regulation of funeral plan contracts would come into force on 1 January 2002 and regulation of deposit taking by credit unions will take place from 1 July 2002.
Laying of secondary legislation under the FSMA
The following orders are now in the process of being debated and voted on by Parliament. Progress has been good and we expect them all to have been voted upon by the end of the month.
(1) The Financial Services and Markets Act 2000 (Regulated Activities) Order 2001
(2) The Financial Services and Markets Act 2000 (Exemption) Order 2001
(3) The Financial Services and Markets Act 2000 (Carrying on Regulated Activities by Way of Business) Order 2001
(4) The Financial Services and Markets Act 2000 (Professions) (Non-Exempt Activities) Order 2001
(5) The Open-Ended Investment Companies Regulations 2001
(6) Financial Services and Markets Act 2000 (Financial Promotion) Order 2001
(7) Financial Services and Markets Act 2000 (Designated Professional Bodies) Order 2001.
We are in the process of seeking Parliament's approval of the orders which prescribe the markets and investments to which the market abuse provisions will apply; the recognition requirements for investment exchanges and clearing houses, as well as the orders setting out when arrangements do not amount to a collective investment scheme; and setting out exemptions to the restriction on authorised persons promoting unauthorised collective investment schemes; and the regulations on appointed representatives of authorised persons.
Address
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