THE NEW SETTLEMENT UNDER THE FINANCIAL SERVICES ACT 1986
| DOI | https://doi.org/10.1108/eb024750 |
| Pages | 47-55 |
| Date | 01 January 1992 |
| Published date | 01 January 1992 |
| Author | PAULINE ASHALL |
| Subject Matter | Accounting & finance |
THE NEW SETTLEMENT UNDER THE FINANCIAL SERVICES
ACT 1986
Received (in revised form): 27th August, 1992.
PAULINE ASHALL
PAULINE ASHALL
IS
A PARTNER OF LINKLATERS & PAINES,
PRACTISING WITHIN THEIR FINANCIAL
SERVICES AND REGULATORY UNIT, WHICH
SPECIALISES IN FINANCIAL SERVICES, BANKING
AND INSURANCE REGULATION. BEFORE
QUALIFYING AS A SOLICITOR, SHE WAS A
LECTURER IN LAW AT SOMERVILLE COLLEGE,
OXFORD. SHE HAS BEEN WITH LINKLATERS &
PAINES SINCE 1985, AND HAS WORKED
CLOSELY ON ALL ASPECTS OF THE FINANCIAL
SERVICES ACT 1986 SINCE ITS INCEPTION.
ABSTRACT
The paper
begins
by
describing
the
back-
(FSA).
It goes on to
con-
sider
both
the need for
change
to the
regu-
latory system established
by the
FSA,
and
the New Settlement which
emerged
as a
result of the
FSA's
shortcomings.
The author
evaluates
the
effectiveness
of the New Settlement and
concludes
by
considering the continuing
pressures
for
changes to
the FSA
which
exist.
INTRODUCTION
The Financial Services Act 1986
(FSA) resulted from the report of
Professor L. C. B. Gower, commis-
sioned by the Department of Trade
and Industry (DTI) in 1981, to con-
sider the legislation relating to
securities and other investments, and
to advise on new legislation.1 At that
time it was generally recognised that
the existing level of regulation was
inadequate. In particular, it would
not meet the challenges created by
the establishment of new inter-
national financial conglomerates in
the City as a result of Stock
Exchange deregulation, known as
'Big Bang'.2 The Gower Report
reached the ambitious conclusion
that all types of investment business
should be brought within a single
statutory framework, thereby creat-
ing a new regulatory regime for such
investment business.3
The FSA was intended to bring
about 'practitioner-based regulation
within a statutory framework',4 and
did not establish a single regulator
of the investment industry. Instead,
the FSA established the Securities &
Investments Board (SIB), a non-
statutory body, to oversee the new
regulatory system.5 All investment
businesses in the UK must be auth-
orised under the FSA, with author-
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