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FINANCIAL SERVICES
AND MARKETS
ACT 2000
REPEALS,
TRANSITIONAL PROVISIONS AND SAVINGS
DECEMBER 2000
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PART XI - RULES
11.1
We propose to make transitional provisions covering three broad issues
relating to rule making by the FSA under its powers, which feature
primarily, but not exclusively, in Part X of FSMA. The relevant provisions
are in the draft Transitionals (Rules) Order.
Continuation
of old rules
11.2
We envisage that in some cases, the FSA will wish to continue in effect,
at least for the short term, a number of the requirements under existing
regulatory arrangements. The effect of this will not be the same
as saving the provisions in their current form as statutory requirements.
The same requirements would take effect after commencement as FSA
rules. This means that, if the requirement is breached after commencement,
the breach will be treated as a breach of an FSA rule rather than
being subject to whatever sanctions are imposed in the legislation
from which it was derived.
11.3
In such cases, it would be disproportionate to require the FSA to
follow all the procedures for rule-making set out in Part X of FSMA.
We therefore propose to allow the FSA to make an instrument designating
existing requirements so that they can be carried forward, subject
to any modifications that may be necessary, in order that they work
for the new regime. We will not require the FSA to reproduce the
full text of the existing requirements as amended provided they are
suitably identified and any modification clearly set out in the designating
instrument. Authorised persons ought already to have copies of the
relevant instruments and we doubt they would welcome having to meet
the cost of producing and receiving duplicate copies. The clear identification
by the FSA of existing requirements carried forward and any modifications
will ensure that newly authorised persons, to whom such requirements
will also apply, can be in no doubt as to the applicable rules.
Consultation
etc prior to commencement
11.5
The Government confirms that it expects the FSA to comply fully with
the requirements of FSMA in future consultation exercises. However,
we do not think it would be proportionate to require the FSA to rerun
all past consultations. This would add to costs, delay implementation,
and leave the industry and consumers uncertain as to their position.
On the other hand, it is clearly right that where new information
relating to proposed FSA rules is made available for the first time,
consultees should be given the opportunity to consider that information
and decide whether they wish to make further representations to the
FSA in the light of it. We therefore propose that any statement that
was missing from the original consultation should be published by
the FSA before it makes its rules. There will then be an opportunity
for further representations to be made. The extent to which such
statements raise new issues will vary from case to case, and the draft
provisions allow the FSA to reflect that in setting the period allowed
for further representations to be made. The FSA must have regard
to those representations in finalising its rules and publish a summary
of the points raised and its response to them at the time the rules
are made. This is consistent with the approach required by FSMA itself.
Part III of the Transitionals (Rules) Order sets out this arrangement.
Modifications
and waivers
11.7 Where an existing rule is
carried forward, we believe it is appropriate to allow any modifications
or waivers to that rule that had been granted by the regulator before
commencement to continue to have effect. For rules subject to the
designation arrangements described above, that will be straight-forward
since the provenance of the new rule will be identified in the designation
instrument.
11.8
Some existing rules will, however, be carried forward as part of a
new rule. Where that happens, and the FSA consider it appropriate
to allow existing modifications and waivers to continue, the FSA will
be able to specify in the rule the way in which any existing modifications
or waivers would continue to apply.
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