98/99
17 June 1999
A NEW GENERATION IN FINANCIAL REGULATION
FINANCIAL SERVICES AND MARKETS BILL PUBLISHED
Announcing the introduction of the Financial Services and Markets Bill into the House of Commons, Chief Secretary to the Treasury Alan Milburn said:
"The Bill establishes the Financial Services Authority as a modern world class regulator for a modern, world class industry.
"The Bill spells out clearly how the FSA will work to enhance the world beating role played by our financial services industry in the City of London. Light touch where possible, protection where necessary, fairness throughout. A light touch in financial markets to enhance international competitiveness. Better protection for consumers, through better information and advice when choices need to made, and better access to redress if things go wrong.
"Under the Bill, regulation will be firm but it will also be fair - fair for those who work in the industry as well as for consumers. It will be fully compatible with the European Convention on Human Rights.
"We have consulted all those affected by the Bill - consumers, practitioners, professionals and regulators- and listened to their views. This has taken time but the Bill we are introducing is much the better for it.
"Most recently, we have had the advantage of innovative and highly successful pre-legislative scrutiny by a Joint Parliamentary Committee. We are extremely grateful to Lord Burns and his Committee for the objectivity and rigour with which their inquiry was carried out. Their valuable conclusions and recommendations have led to several important amendments. The Committee has made a major contribution to a major Bill."
Key changes made to the Bill in the light of the Committee's reports include the following:
- Statutory objectives: In considering how to meet the consumer protection objective, the FSA will now be specifically required to take account of consumers' needs for advice and accurate information.
- Accountability: The roles of the new consumer and practitioner panels and arrangements for handling complaints against the FSA have been strengthened in various ways.
- Enforcement procedures: A number of improvements and safeguards have been added, including separation of disciplinary decisions from investigations, a requirement for the FSA to rebate gross income from financial penalties to the regulated community, and a presumption that the outcome of disciplinary cases will be made public.
- Market abuse: Protections have been introduced against the use of compelled evidence in proceedings to impose a penalty for market abuse ('Saunders-proofing'), subsidised legal assistance will be made available in appropriate market abuse cases and compliance with express provisions of the FSA Code will be an absolute defence in market abuse proceedings.
NOTES FOR EDITORS
1. Non-media copies of the full Government Response to the Reports of the Joint Committee on Financial Services can be obtained from the Treasury Public Enquiry Unit on 020 7270 4558 or accessed here.
2. Media enquiries should be addressed to Charles Keseru at the Treasury Press Office on 020 7270 5188.