Financial Services (Banking Reform) Act 2013

Financial Services (Banking Reform) Act 2013

2013 CHAPTER 33

Commentary

Part 1 – Ring-Fencing

Ring-fencing

Section 2: Modification of objectives of the Financial Conduct Authority

24. Section 2 amends FSMA to give the Financial Conduct Authority (“FCA”) a new continuity objective. This is applicable only if a core activity is not regulated by the PRA and accordingly falls under the remit only of the FCA. New section 1EA defines the “continuity objective”: the protection of the continued provision in the UK of core services. This objective will be relevant when the FCA is exercising its general functions in relation to the ring-fencing matters listed in subsection (2) of the new section 1IA. Subsection (3) of that section sets out the ways in which the FCA is to be required to advance the continuity objective. The focus is on ensuring that there is no adverse effect on the continuity of the core services in the United Kingdom. The modification of section 1B(4) of FSMA by section 2 would have the effect that promoting effective competition in the interests of consumers would be relevant when the FCA is acting so as to advance its continuity objective.