Stepping into the shadow structure

With the transition to the UK’s new regime for financial regulation only months away, Jacqui Hatfield discusses latest developments and potential pitfalls.

Jacqui Hatfield is a partner and head of the financial services advisory group at Reed Smith. She can be contacted at jhatfield@ReedSmith.com.

The Financial Services Authority will be abolished in 2012 and replaced by the twin peaks approach favoured by the US and Australia, of a Financial Policy Committee (FPC), a Prudential Regulatory Authority (PRA) and a Consumer Protection and Markets Authority (CPMA). Detailed proposals on core parts of draft legislation reforming the structure are due to be published for consultation in early 2011, with implementation of the legislation and associated administrative measures during 2012. While the deadline for the new bodies to be operational is January 2013, the FSA is intending to move to an internal ‘shadow’ structure in early 2011 to assist with the smooth transition to the new structure. Under the new regulatory regime, the roles of the new bodies will be as follows.