Queen's Speech 2009: Financial Services Bill
19/11/2009
The government has set out what it hopes to achieve in the few remaining parliamentary days before the election. Of the proposals announced in the 2009 Queen's Speech, the Financial Services Bill is likely to have the biggest impact on our industry if it passes into legislation. Below is an outline of the measures within the Bill.
The Financial Services Bill
- A new statutory Council for Financial Stability
This will replace the current Standing Committee on Financial Stability, and will be chaired by the Chancellor. This will consist of representatives from HM Treasury, the Bank of England and the Financial Services Authority. - A new financial stability objective for the FSA covering firms beyond its remit
A strengthening of the FSA, by providing explicit objectives and formalising its international work. - Class action and consumer redress
The government aims to create routes for consumer redress, including enabling a representative to bring an action through the courts on behalf of a group of consumers (class actions), streamlining the FSA's current powers ('s404 powers') to order a review of past business, and secure compensation if there have been legal or regulatory breaches. - Tough requirements on systemically important financial firms to produce 'living wills'
Intended to make firms safer and easier for them to be wound down. It is our understanding that in the detail of the Bill there will be information on additional capital requirements for these firms. - Remuneration
So far, it has only been announced that action on remuneration will be taken nationally and internationally. According to recent press articles and speeches, the FSA may be granted new powers to cancel individual contracts on bonuses that encourage excessive risk-taking. - A new Consumer Financial Education Body
This body will be tasked to deliver a new national money guidance service and is expected to be at arms-length from the FSA.
As this Bill progresses through the parliamentary process we will let you know how this legislation may affect you and your clients.
Please visit the Support for you section of our website for further up-to-date information about changes to our market place.
Prudential's summary of the Queen's Speech is based on our understanding, as at November 2009, of current taxation, legislation and HM Revenue & Customs practice, all of which are liable to change without notice. The impact of taxation (and any tax reliefs) depends on individual circumstances.
