International Securities Law and Regulation - 2nd Edition - Looseleaf
International Securities Law and Regulation - 2nd Edition - Electronic
Michael Hatchwell and Anthony Fiducia
The purpose of this chapter is to provide the reader with a view of the regulatory system
relating to securities in England. Everything in this chapter relates equally toWales, and
most of what is set out also will apply to Northern Ireland and Scotland, although there are
differences which are not dealt with here.
The English regulatory system is undergoing a period of considerable change with the
introduction of the Financial Services Authority (FSA) to replace the Securities and
Investment Board. The scale of change is apparent from the fact that the Financial Services
Authority will take over from the Bank of England responsibility for supervising
banks, listed money market institutions, and related clearing houses.
The area covered by this chapter is large. In a sophisticated and developed market which
is the English securities market, any subject heading in this chapter could alone be the
subject of a book and, indeed, most of them have been. Accordingly, the authors have
sought to focus on the principal rules, regulations, and practices relating to them.
The New Regulatory Regime
The draft Financial Services and Markets Bill, introduced into Parliament in June 1999, is
a substantial piece of legislation. It sets out a framework for market regulation, leaving
much of the detailed substantive provisions to secondary legislation.
The draft Bill will establish a single regulatory regime for all kinds of financial services
and a single statutory regulatory, the FSA, to replace the existing financial services regulators,
including the self-regulatory organisations.
The draft Bill controls regulated activities. Carrying on any regulated activity without
authorisation or exemption will be a criminal offence, and contracts entered into without
authorisation or exemption will be unenforceable by the financial services provider.
Once authorised status is granted, a firmwill obtain permission to engage in one ormore regulated
activities. Afirmcarrying on regulated activities for which it has no permission will be
subject to disciplinary action, and it may lose its authorisation.