HL Deb 12 July 2001 vol 626 cc87-8WA
Lord Dubs

asked Her Majesty's Government:

When they expect to commence the Financial Services and Markets Act 2000. [HL324]

Lord McIntosh of Haringey

The former Economic Secretary to the Treasury (Melanie Johnson MP) announced in March that "N2", the date for commencing the main provisions of the Financial Services and Markets Act 2000, would be no later than the end of November 2001. I can now confirm that, in lay terms, the new regime will come into effect at midnight on 30 November. For legal reasons, the date named in the Commencement Order will be 1 December. Naming this day will have the effect of commencing the main provisions of the Act from the beginning of that day, which complies with the timescale set by the former Economic Secretary. So far, the Government have secured Parliament's approval for seven statutory instruments subject to affirmative resolution, and made a further 27 statutory instruments subject to the negative resolution procedure.

We will shortly be making other statutory instruments with a view to enabling the FSA Board to make further provisions of its rulebook at its board meeting on 19 July. The key provisions of the rulebook, of course, were made by the FSA at its board meeting on 21 June.

In particular, we expect shortly to make the statutory instrument that provides mechanisms by which firms having authority under old law to do financial services business will be "grandfathered" across into permissions to do equivalent business once FSMA commences. The FSA will then be responsible for letting individual firms know their grandfathered permissions.

From Monday 3 September, we will commence FSA powers to consider applications from financial services firms to modify their grandfathered permissions or the grant of new permissions; 3 September will also be the date from which the Financial Services and Markets Tribunal will consider appeals on decisions taken by the FSA in respect of those applications.

By the Summer Recess, therefore, the task of implementing the Act will pass substantially to the financial services firms. They will need: to become familiar with the secondary legislation passed by Government; to absorb the provisions of the rule book made by the FSA; to analyse their grandfathered N2 permissions, and consider whether to seek modifications to those permissions; to adapt their procedures; and to train their staff.

The date set for N2 ensures that the new regime for financial regulation starts after the close of business on the day, week and month, and should further assist financial services firms in making their adjustment.