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FINANCIAL SERVICES AND MARKETS ACT 2000:  RECENT DEVELOPMENTS

Bulletin number ten from HM Treasury

This is the tenth bulletin covering developments on the Financial Services and Markets Act 2000 (FSMA).

Laying of secondary legislation under the FSMA

Since bulletin 9, we have made the following orders:

• SI 2001 No 2968: The Financial Services and Markets Act 2000  (Treatment of Assets of Insurers on Winding up) Regulations 2001
• SI 2001 No 2967: The Financial Services and Markets Act 2000 (Transitional Provisions, Repeals and Savings) (Financial Services Compensation Scheme) Order 2001
• SI 2001 No 2966: The Financial Services and Markets Act 2000 (Pre-Commencement Modifications) Order 2001
• SI 2001 No 2958: The Financial Services and Markets Act 2000 (Offers of Securities) Order 2001
• SI 2001 No 2957: The Financial Services and Markets Act 2000 (Official Listing of Securities) (Transitional Provisions) Order 2001
• SI 2001 No 2956: The Financial Services and Markets Act 2000 (Official Listing of Securities) Regulations 2001
• SI 2001 No 2955: The Financial Services and Markets Act 2000 The Public Offers of Securities (Exemptions) Regulations 2001

Interim authorisation

1.           The Economic Secretary, Ruth Kelly MP, announced on 20 July that, where appropriate, applicants for authorisation by the FSA under FSMA will receive interim authorisation until the application has been determined.

2.           The purpose of interim authorisation is to ensure that firms can carry on their existing business while the FSA determines their application.

Process

3.           We expect shortly to lay before Parliament detailed legislation on interim authorisation. Two of the conditions we plan to set are: first, that interim authorisation will be available only for applications made to the FSA for authorisation which are received between 3 September and 31 October 2001.

4.           Second, that interim authorisation will be available to businesses which are currently lawfully carrying on an activity without authorisation and for which they will require authorisation for the first time after N2 or, in respect of pre-paid funeral plans, after 1 January 2002. Interim authorisation will not however be compulsory: some businesses may not wish to carry on regulated activities or be subject to FSA regulation before the FSA has determined their application.

5.           We expect interim authorisation to be available to businesses whose status will change at N2, for example because of the ending of the permitted persons regime under the 1986 Financial Services Act, and the FSA is already in discussion with a number of affected businesses; and to businesses which are currently carrying on activities which become regulated for the first time at N2 or at 1 January 2002.

6.           The forthcoming legislation will set out the position of those with interim authorisation. We expect however that such businesses will have most of the privileges and obligations of businesses with full FSA authorisation. They will therefore be able to carry on relevant regulated activities but be subject to FSA rules in doing so.

e-commerce directive

The e-commerce directive is to be implemented before 17 January 2002.  The Department of Trade and Industry recently issued a consultation document (website address below) on implementation, but noted that the Treasury would be consulting separately on implementation in respect of financial services.  When our consultation document is published we will use this bulletin, and the Treasury’s website, to publicise this.

http://www.dti.gov.uk/cii/ecommerce/europeanpolicy/ecommerce_directive.shtml

Address and method of receipt

We are keen to deliver the bulletin by e-mail where possible, if you would like to switch from hard copy to e-mail please contact Deirdre.Barrie@hm-treasury.gov.uk; also if your address has changed or if you no longer require this bulletin.

HM Treasury
6 September 2001