Secondary legislative layer of Financial Services and Markets Act 2000 takes shape
| Date | 01 March 2001 |
| Pages | 284-286 |
| DOI | https://doi.org/10.1108/eb025083 |
| Published date | 01 March 2001 |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 9 Number 3
Secondary legislative layer of Financial
Services and Markets Act 2000 takes shape
The Economic Secretary to HM Treasury,
Miss Melanie Johnson, announced on 15th
March that 'N2', the date on which most
of the Financial Services and Markets Act
2000 will be implemented, will definitely
take place before the end of November
2001.
That important and long awaited
announcement has been followed by a
spate of government and parliamentary
activity in order to put in place essential
elements of the secondary legislation that
HM. Treasury has the power to make
under the Financial Services and Markets
Act 2000 (FISMA). Much of that Act,
important as it is to changing the structure,
policy grounding and direction of UK
financial regulation, is enabling in effect
and leaves many key areas, such as, the
scope of the general prohibition on carry-
ing on regulated activities without authori-
sation or exemption, to be detailed by
secondary legislation. On 9th May Miss
Melanie Johnson made a further significant
announcement in response to a parliamen-
tary question, namely that the provisions
of FISMA which confer rule-making
powers and status as the sole financial regu-
lator on the Financial Services Authority
(FSA) will be commenced on 18th June,
2001.
This is necessary in order to enable it
legally to 'make' and therefore finalise its
by now very extensive Handbook of Rules
and Guidance so that firms can prepare for
N2 on the basis of its content. The follow-
ing Orders and Regulations have already
been made with the main effects as
described.
Financial Services and Markets Act 2000
(Commencement No. 1) Order 2001 (SI
516/2001). This Order brought into force,
with effect from 25th February, 2001 cer-
tain provisions of FISMA which, in the
main part, contain powers to make subor-
dinate legislation, orders and regulations,
or contain definitions of expressions used in
the Act.
Financial Services and Markets Act 2000
(Regulated Activities) Order 2001 (SI 544/
2001).
Most of the provisions in this Order
will take effect on the same day of com-
mencement applicable to s.19 FISMA
which is itself the 'general prohibition'
around which the regulatory part of
FISMA is built. This Order is made pur-
suant to HM Treasury's power in s.22
FISMA and it specifies the kinds of activ-
ities and investments which constitute
'regulated activities' for the purposes of the
definition of s.19 of FISMA. When such
activities are carried on by way of business
they must be either authorised or exempt
to avoid contravention of the general pro-
hibition contained in s.19 of the Act. It is
key to defining the 'scope' or the 'four cor-
ners'
of much of the legislation and the
FSA Handbook and therefore deserves
careful attention and demands a sufficient
familiarity in order to avoid business activ-
ities falling accidentally within the scope of
s.19.
Financial Services and Markets Act 2000
(Carrying on Regulated Activities by Way
of Business) Order 2001 (SI 1177/2001).
Again, this Order will take effect on the
date of commencement of s.19 FISMA. It
specifies the circumstances in which persons
are,
or are not, to be regarded as carrying
on regulated activities by way of business
for the purposes of FISMA and it is impor-
tant since s.22 FISMA specifies that activ-
Journal of Financial Regulation
and Compliance, Vol. 9, No. 3,
2001,
pp. 284-286
© Henry Stewart Publications,
1358-1988
Page 284
To continue reading
Request your trial