Implementing the Financial Services and Markets Act

Howard Davies, Chairman of the Financial Services Authority, said:

"The new regime will bring benefits to both consumers and firms, so we would like to see it in operation as soon as possible. But we must consult properly on the details and give firms time to adapt their systems and training. The target announced today strikes a realistic balance between these two considerations."

He went on to outline the timing of certain of the key elements in the preparations.

The FSA Handbook

"Preparation of the Handbook of rules and guidance continues at a rapid pace and it is our intention to complete as much of the material as possible by the end of the year. Major elements have already been completed and others, such as the Conduct of Business Sourcebook (COBS), are currently out for consultation. We realise how important it is to allow sufficient time for our stakeholders to comment on this material. Given todays announcement, we are now extending the deadline for the COBS consultation from 11 August to 15 September."

He said that other key material about to be issued shortly, included:

• next week, a revised Code of Market Conduct which will include detailed material about the FSAs powers in relation to market abuse; and

• in late summer, the authorisation, supervision and enforcement manuals. These will set out the processes that will govern the relationship between firms and the FSA and also the FSAs decision-making arrangements.

Transitioning firms to the new regime

"The intention is that, when the new regime comes into effect, all firms and individuals carrying out authorised activities and controlled functions will migrate to the new authorisation and permissions regime. This is a major project involving complex legal, administrative and IT issues. The aim is to ensure that firms can continue to do the same business and that consumers can continue to check what firms are authorised to do.

"We aim to put out some guidance on this process in the autumn."

Consumers

"Preparations continue for the creation of single compensation and ombudsman schemes and we will continue to build on key consumer awareness initiatives such as our consumer website, helpline and range of plain-English advice booklets."

Risk-based supervision

"More generally, our strategy statement A new regulator for the new millennium earlier this year explained how we proposed to harness the benefits of an integrated financial services regulator in the medium term. Since its publication, we have made considerable progress and we will be publishing further details in the autumn."

Notes for editors

1. The FSA is the independent body established by Parliament to regulate the financial services industry.

2. The four FSA objectives under the Financial Services and Markets Act are: market confidence, consumer awareness, consumer protection and fighting financial crime.