HM Treasury News Release

199/98                               24 November 1998
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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.

NOTES TO EDITORS

1.  If you have access to the Internet, you can find this news
    release and other Treasury information at http:www.hm-
    treasury.gov.uk


# = pounds sterling