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Consumer financial services: political events to keep your eye on in 2012/13
We’ve complied a list of the main political events that financial services companies should be looking out for in the UK and Europe on 2012 and early 2013. Highlights include the outcome of the Jackson Review in the form of Legal Aid, Sentencing and Punishment of Offerders (LASPO) Bill which is expected to pass through Parliament imminently, and the implementation of the Finacial Services Bill which reflects the Government’s commitment to strengthen the financial regulatory structure in the UK following the recent banking crisis.The legislation will fundamentally reform the current regulatory system, which divides responsibility for financial stability between the Treasury, the Bank of England and the Financial Services Authority (FSA). And of course the much awaited Retail Distribution Review (RDR) which will finally come into effect at the end of this year.
1. UK Political Update
- April 2012
- Legal Aid, Sentencing and Punishment of Offenders Bill (LASPO) expected to complete its passage through Parliament into law
- Spring 2012
- Wednesday 9 May – Queens speech outlining legislation for next parliamentary session
- It has been announced that the Financial Services Bill will roll over
- The Finance Bill (implementing Budget 2012) will roll over
- Bill to close down the Audit Commission published in draft formal for pre-legislative scrutiny, which allows for examination and amendments to be made before formal introduction of a final Bill to Parliament. Possibly nearer to July/August
- Summer 2012
- Secondary legislation (following consultation) for the Finance Bill (Budget 2012) introduced. Finance Bill 2012 includes anti-forestalling measures to ensure swift passage into law
- Energy Bill laid before Parliament. This is currently being drafted, and there may be a period of pre legislative scrutiny, so it could be August/September (or later) if Government doesn’t really push it forward. The Bill will establish a framework of market mechanisms to incentivise investment in low carbon infrastructure
- Secondary legislation for LASPO Bill expected
- Financial Services Bill (possibly) completes its passage through parliament (could be more like Autumn)
- Proposals for replacing the Statement of Principles (flood insurance) expected to be announced
- Autumn/Winter 2012
- The ‘Protecting with-profits policy holders’ policy document will be used as a basis for further consultation and development to be published later this year
- 1 October 2012 – changes laid out in Finance Bill 2012 come into effect
- 31 December 2012 – RDR target for full implementation. The FSA plans to share its supervision strategy during the last quarter
- April 2013
- LASPO Bill measures implemented (Legal Aid, referral fees etc)
- Statement of Principles (flood insurance) expires. Government has not yet agreed what kind of framework will exist in its place. It is currently in discussion with stakeholders and is hoping to publish proposals by Summer 2012
Other
- Vickers Bill: This should be introduced at some point in the coming year. Government is committed to getting this onto the statute books (along with any secondary legislation required) before the next election so a Bill needs to be drafted and presented soon
- Simple Products: There is currently a steering group, chaired by Carol Sergeant, which is working to draw up governance arrangements for simple products, as well as develop a range of products that are both appealing to consumers and a viable commercial proposition for providers. The Group’s engagement with stakeholders is ongoing, and there is currently no date set for an announcement of their conclusions
2. EU Political Update
- The European Banking Authority (EBA) launched a consultation on the draft guidelines on the assessment of the suitability of members of the management body and key function holders. Period of consultation: 18.04.2012 until 18.07.2012
- The agenda of the Economic and Monetary Affairs Committee (ECON) meeting scheduled for April 25 – 26 2012 in the European Parliament has been published
- The European Supervisory Authorities Joint Committee Work Programme 2012 has been published
- The Legal Affairs (JURI) Committee has published its draft opinion on the proposal for a regulation of the European Parliament and of the Council on insider dealing and market manipulation (market abuse)
- Debates over a potential European Financial Transaction Tax (FTT) continue within the European Parliament. A plenary session vote is expected on May 22nd 2012 but the European Commission’s proposal is unlikely to be adopted in the absence of unanimity between Member States
- On corporate governance potential legislative proposals might come up in 2012, various corporate governance provisions including remuneration, will enter into force through Capital Requirements Directive IV (CRD IV) in January 2013 and Solvency II in 2014
- The European Court of Justice (ECJ) ruling on the EU gender directive left until December 21st 2012 to comply with rules preventing gender discriminatory treatment. Due to lack of clarity in European Commission guidelines, industry analysts consider that the ECJ will have to rule again for clarification in the medium-term