Financial Services Act 2012 Explanatory Notes

Financial Services Act 2012

2012 CHAPTER 21

Commentary

Part 2 - Amendments of Financial Services and Markets Act 2000

Performance of regulated activities

Section 15 and Schedule 5: Further amendments relating to performance of regulated activities

232. Section 15 introduces Schedule 5, which makes amendments to Part 5 of FSMA (performance of regulated activities) consequential on the replacement of the FSA by the new regulators.

233. Paragraph 2 of Schedule 5 makes consequential amendments to section 58 of FSMA (prohibition orders).

234. Paragraphs 3 to 18 amend sections 59 to 70 of FSMA (approval). The amendments are primarily consequential on the amendments made by section 14.

235. Paragraph 5(6) amends the timetable for determining an application for approval set out in section 61 of FSMA. The amendment provides that where the application is made by a person who is also applying for permission under Part 4A, the application must be determined by the date by which the application for permission must be determined (see new section 55V) or 3 months after the application is received, whichever is the later.

236. Paragraph 7 amends section 63 of FSMA (withdrawal of approval) to ensure that both regulators may withdraw approval. The withdrawal does not have to be by the regulator that gave the approval provided that the application for approval could have been made to that regulator.

237. Paragraph 13 amends section 65 of FSMA (statements and codes: procedure) to require the FCA and PRA to consult each other before issuing a statement or code under section 64. The definition of “cost benefit analysis” in section 65(11) is also amended so that the regulator need only provide an analysis of the costs and benefits arising from the proposal rather than an estimate of those costs and benefits where the regulator is of the opinion that the costs or benefits cannot be reasonably estimated or it is not reasonably practicable to produce an estimate; where that is the case, the regulator must include in a statement with an explanation of its opinion.

238. Paragraph 14 amends section 66 of FSMA (disciplinary powers) to provide that a person is guilty of misconduct for the purposes of each regulator (and so amenable to action by that regulator under section 66) if a person has failed to comply with a statement of principle issued by that regulator. Thus each regulator may take action only in relation to a breach of its own statement. In addition, each regulator may take action if the approved person is knowingly concerned in a contravention by the relevant person of requirements under FSMA or EU provisions specified by the Treasury.