On the first of April, 2013 the UK Financial Services industry is going to see the introduction of a ‘Twin Peaks’ regulatory regime. This change will see the Financial Services Authority (FSA) spilt into two new regulators, the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
The FCA will be responsible for:
ensuring that relevant markets function well for the conduct supervision of financial services firms the prudential supervision of firms not supervised by the Prudential Regulation Authority (PRA). The single strategic objective of the FCA will be; to protect and enhance confidence in the UK financial system. However it has three more operational objectives to deliver:
Securing an appropriate degree of protection for consumers Promoting efficiency and choice in the market for financial services Protecting and enhancing the integrity of the UK financial system The PRA will be responsible for promoting the safety and soundness of deposit-taking firms, insurers and systemically important investment firms.
Like the FCA, the PRA has a single strategic objective, which is: to promote the safety and soundness of regulated firms and this will be achieved by seeking to;
minimise the adverse effect that the failure of a PRA-authorised firm could be expected to have on the stability of the UK financial system ensure that the business of PRA-authorised firms is carried on in a way which avoids any adverse effect on the stability of the UK financial system Below is an overview of the new regulatory landscape, courtesy of the FSA.