Timeline of Uk Regulatory Events Essay

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Figure 9: Timeline of UK regulatory events

1980s Introduction of the modern regulatory system; self-regulation among asset managers, statutory oversight of banks and insurers. The Financial Services Act 1986 (FSA 1986) marks a step change in the nature and extent of UK investment business regulation. April 1988 sees the introduction of a regulatory system that has investor protection as its main aim. The system is based on five selfregulating organisations (SROs);48 membership organisations tasked with the creation, monitoring and enforcement of rules for their respective members. The SROs cover five different areas of financial services; futures broking and dealing, financial intermediation, investment management, life assurance broking
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The supervisory culture at the FSA is often characterised by a series of overarching approaches and themes, such as ‘more principles-based regulation’ and ‘Treating Customers Fairly’. The FSA Handbook, a set of rules to which regulated firms are subject, becomes increasingly prescribed by EU legislation. This is aided by the FSA’s move to the socalled ‘copy-out’ approach, transposing directives word for word, where possible, in order to avoid ‘gold-plating’. The FSA grows in size and cost through greater activity for the Financial Ombudsman Service and increasing calls on the Financial Services Compensation Scheme, fuelled by a growing number of consumer complaints especially around bank charges and payment protection insurance. The FSA also increases its enforcement activity, especially on market issues and in terms of stepping up fine sizes.

Financial crisis and beyond The single regulatory structure is restructured as a response to the crisis. National supervisors face greater harmonisation of practice at EU level. The need to prop up the banking system introduces a new actor, the Resolution Authority (in the UK a role of the Bank of England), as the Tripartite Authorities50 put in place legislation to deal with bank resolution after the collapse of Northern Rock. Major banks are now required to have recovery and resolution plans (‘living wills’). Government announces the planned break-up of the FSA in 2012. It transfers the prudential supervision of banks
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