Innovative scrutiny procedures for the Financial Services and Markets Bill

Stephen Byers Outlines Timetable for the Bill

The proposals to modernise and reform the regulation of financial services in order to achieve fairness and support enterprise will come under unprecedented scrutiny procedures the Chief Secretary Stephen Byers announced today.

The Financial Services and Markets Bill will make the Financial Services Authority (the FSA) the single regulator for the UK's financial services industry, backed by law.

The Chief Secretary said:

"This Bill is a prime example of this Government's aim to reform and modernise Britain. Regulation of financial services in this country has been long overdue for an overhaul. Our proposals are aimed at achieving fairness and supporting enterprise.

"The UK financial services industry is a highly successful and very important part of the UK economy -accounting for 7% of GDP and employing more than one million people.

"These reforms will shape a financial regulator that will maintain confidence in UK markets at both home and abroad and enhance London's position as one of the leading financial centres in the world."

A draft Bill was published for consultation at the end of July and Mr Byers announced the following timetable for the Bill:

a joint committee, from the Houses of Commons and Lords, to be established in the New Year, to scrutinise the Bill before it begins the usual Parliamentary stages;
the joint committee to report by around Easter and the Bill to begin its Parliamentary stages as soon as possible thereafter;
subject to satisfactory pre-legislative scrutiny by the joint committee and progress through the House of Commons later this session, the Government may seek all-party agreement under the procedures agreed by both Houses to carry this Bill over into the third session when it would complete its legislative passage early in the Year 2000; and
consultation early in the New Year on key secondary legislation to be made under the Bill - on the scope of regulated activities, the financial promotion regime and the criteria for recognised investment exchanges.

The Chief Secretary said:

"Our consultation on the draft Bill shows there is strong support for our plans to overhaul financial regulation. We want to ensure that the details of this important and extensive piece of legislation are given full and careful consideration by as a wide an audience as possible. This will be achieved by the scrutiny by the joint committee and separate consultation on specific areas of the Bill.

"The establishment of the joint committee and the possible carry-over of the Bill to the third Parliamentary session are historic and show the importance of this Bill and to getting financial regulation in this country right."

The Financial Services and Markets Bill aims to replace the nine existing regulators with one statutory body, the FSA. It will have clear regulatory objectives and a single set of coherent functions and powers. The Bill will also provide:

a single authorisation process;
a single compensation scheme;
a single ombudsman scheme;
a single appeals tribunal; and
new powers to tackle market abuse.