Figure 9: Timeline of UK regulatory events

1980s Introduction of the modern regulatory system; self-regulation among asset managers, statutory oversight of banks and insurers. The Financial Services Act 1986 (FSA 1986) marks a step change in the nature and extent of UK investment business regulation. April 1988 sees the introduction of a regulatory system that has investor protection as its main aim. The system is based on five selfregulating organisations (SROs);48 membership organisations tasked with the creation, monitoring and enforcement of rules for their respective members. The SROs cover five different areas of financial services; futures broking and dealing, financial intermediation, investment management, life assurance broking …show more content…

Financial stability becomes a key objective of the new regulatory regime. The interim Financial Policy Committee, a new committee of the Bank of England, is charged with responsibility over this area, and is planned to become part of the new regulatory structure. v The FSA’s objectives are altered by the Financial Services Act 2010, with Public awareness replaced by Financial stability (contributing to the protection and enhancement of stability in the UK financial system). The FSA is to be re-named to the Financial Conduct Authority (FCA), introducing more intrusive supervision. This will, alongside other changes, include a commitment to challenge a firm’s own judgement concerning their business models, strategy, and product development.

In April 1990, the “New Settlement”, proposed under the auspices of second SIB Chairman, Sir David Walker, introduces a three-tier structure of standards imposed upon firms. v At the top tier, the Ten Principles of business seek to present a universal statement of the expected standards, applying directly to the conduct of investment business and to the financial standing of all authorised persons. They are qualitative, high-level and frequently behavioural in their expression. v The second tier designates a number of Core Rules, binding upon SRO members in certain key areas, such as those relating to financial resources, conduct of business and client money. v The