UK's ASIC gets axed

insurance/mortgage/financial-services-sector/treasury/australian-securities-and-investments-commission/government/chief-executive/

17 June 2010
| By Lucinda Beaman |
image
image
expand image

The UK regulatory system will be overhauled and the Financial Services Authority (FSA) — the UK’s version of the Australian Securities and Investments Commission (ASIC) — axed under reforms by the new Chancellor of the Exchequer, George Osborne.

Osborne has announced plans to dismantle the UK’s tri-partite regulatory system, which saw responsibility carved up between the Bank of England, the Treasury and the FSA.

It was a system Osborne had “profound doubts” about. In his view the system saw the Bank of England focus too strictly on consumer price inflation, the Treasury’s financial policy division drift into a backwater, and the FSA become “a narrow regulator, almost entirely focused on rules-based regulation”. Osborne described it as a system that had “profoundly failed”.

The Government will now dismantle the FSA and create a new prudential regulator operating as a subsidiary of the Bank of England. The new body will carry out the prudential regulation of banks, investment banks, building societies, insurance companies and other financial firms.

FSA chief Hector Sants will remain with the FSA to oversee the transition and will then become the first new deputy governor and chief executive of the new prudential regulator.

A new ‘financial policy committee’ at the Bank of England will examine and regulate macro issues that threaten economic stability, while a “powerful” new Consumer Protection and Markets Authority will be created. That authority will regulate the conduct of consumer-facing financial services firms , as well as regulating conduct in the UK’s retail and wholesale financial services sectors.

The FSA acts much like ASIC here — monitoring firms and individuals, banning them from the industry where necessary and conducting industry-wide reform. The FSA is currently undertaking a wide-ranging review of the financial services sector, not unlike those taking place in Australia.

Also like ASIC, the FSA has been given increased powers over the past decade. The FSA became the UK’s single regulator for financial services in 2001. In 2004 it began regulating mortgage businesses and in 2005, general insurance activities. Since November last year the FSA has also regulated banks and building societies.

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

So we are now underwriting criminal scams?...

2 months 3 weeks ago

Glad to see the back of you Steve. You made financial more expensive, not more affordable as you claim, and presided ...

2 months 3 weeks ago

Completely agree Peter. The definition of 'significant change is circumstances relevant to the scope of the advice' is s...

4 months 4 weeks ago

ASIC has suspended the Australian Financial Services Licence of a Melbourne-based financial advice firm....

1 week 4 days ago

The corporate regulator has issued infringement notices to three AFSLs whose financial advisers provided personal advice to a retail client while unregistered....

2 weeks 3 days ago

ASIC has released the results of its first adviser exam to be held in 2025, with 241 candidates attempting the test....

3 weeks 1 day ago

TOP PERFORMING FUNDS

ACS FIXED INT - AUSTRALIA/GLOBAL BOND