The Bill, which has now become an Act of Parliament, will be known as the Financial Services Act and sets out a clear and coherent regulatory framework, replacing the uncertainty and inadequacy of the failed Tripartite system.
The Act, which comes into force from 1 April next year, will:
• give the Bank of England responsibility for protecting and enhancing financial stability, bringing together macro and micro prudential regulation;
• abolish the Financial Services Authority (FSA) and create a strengthened regulatory architecture consisting of the Financial Policy Committee, the Prudential Regulation Authority and the Financial Conduct Authority; and
• empower authorities to look beyond ‘tick-box’ compliance and foster a regulatory culture of judgment, expertise and proactive supervision.
Greg Clark, financial secretary to the Treasury, said: “I am delighted that the Financial Services Bill has received Royal Assent today.
“The Financial Services Act replaces a regulatory structure which palpably failed when tested by crisis. It sets out a comprehensive regulatory framework designed to enhance financial stability in the future and protect consumers.
“It takes important steps to focus the regulators on rebuilding competition in a banking sector that has become too concentrated.
“It is important that the reputation of the UK as a global financial centre is underpinned by a regulatory environment in which the world’s investors, as well as British taxpayers, can have confidence. These reforms – as well as those in the forthcoming Banking Reform Bill – can help rebuild confidence and trust.”