The Regulatory Reform (Financial Services and Markets Act 2000) Order 2007

EXPLANATORY NOTE

(This note is not part of the Order)

This Order is made under section 1 of the Regulatory Reform Act 2001. It reforms the law by amending various provisions of the Financial Services and Markets Act 2000 (FSMA).

Article 3 amends section 32 of FSMA, with the result that a firm or individual may succeed to the business of a predecessor firm without obtaining a new authorisation if they succeed to the whole or substantially the whole of the business of the former firm.

Article 4 amends section 49 of FSMA, with the result that the Financial Services Authority (FSA) is only required to consult the firm’s home state regulator before giving a permission under Part 4 of FSMA to a person connected with a firm authorised in another Member State, or varying any permission where the effect is to grant permission for the purposes of a single market directive other than the one for the purposes of which the existing permission was granted.

Articles 5 to 7 amend Part 6 of FSMA (official listing) with the result that the procedural requirements at section 78 of FSMA will not apply where the FSA receives an application from the issuer to discontinue or suspend the listing of his securities. The lighter touch requirements at section 78A will apply instead. Article 8 makes a consequential change to the notification provisions at section 395 FSMA.

Article 9 amends section 88 of FSMA with the result that the procedural requirements at section 88 will not apply where a sponsor applies to cancel his approval as a sponsor.

Article 10 amends section 148 of FSMA with the result that all rules made by the FSA (except those made under section 247 or 248 of FSMA) may be waived or modified using the power at section 148. In addition, the amendment will enable any person to apply for, or consent to, the waiver or modification of rules applying to that person. Articles 11 and 12 make consequential amendments to section 250 of FSMA and to regulation 7 of the Open-Ended Investment Companies Regulations 2001 which result from the changes to section 148 of FSMA.

Article 13 amends section 157 of FSMA with the result that when it publishes a draft of proposed guidance for consultation, the FSA will no longer be required to produce a cost benefit analysis, an explanation of the purpose of the proposed guidance or an explanation of the FSA’s reasons for believing that making the proposed guidance is compatible with its general duties under section 2 of FSMA. In addition, the amendment will mean that the FSA will not be required to follow the procedural provisions at section 155(5) to (9) as they apply to proposed guidance.

Article 14 amends paragraph 5 of Schedule 1 to FSMA to enable guidance to be issued by a committee or sub-committee of the FSA’s governing body.

A full Regulatory Impact Assessment has been produced for this instrument and is available from the Financial Stability and Regulatory Policy Team, HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ. The Regulatory Impact Assessment is also available on HM Treasury’s website (www.hm-treasury.gov.uk).