FSA's Regulatory Timeline

I have endeavored to put together a regulatory timeline for FSA. I thought this will be useful for those who want to know when FSA was formed and the important milestones and events that have occured since its inception in 1997.

Please do let me know if I have missed an important date...

FSA’s Regulatory Timeline

· October 1997 - In 1997 Securities and Investment Board along with its self-regulatory organisations were consolidated under one roof and re-named as the Financial Services Authority.

· June 1998 (N1) - Major change occurred in 1998 when the responsibility for banking supervision was transferred from the Bank of England to the FSA. This date is generally known as N1.

· 1 December 2001 (N2) - FSA received statutory and regulatory powers under the Financial Services and Markets Act 2000 (FSMA) on 1st of December 2001. This date is known as N2.

· 26 October 2001 - The Patriot Act signed by President George W Bush as a result of event of 11 September 2001. Covering 900 pages of legislation, the Act provides legislation on international money laundering and terrorist financing for financial institutions based in United States and abroad.

· October 2001 - In response to 11 September 2001 events in US, FATF expanded the international anti money laundering standards to include Eight Special Recommendations on Terrorist Financing

· October 2004 - FATF expanded its comprehensive framework for anti-money laundering and terrorist financing, making its overall standards to 40 plus 9 recommendations

· 2004 - Basel II, the Capital Requirements Directive is introduced by Basel Committee to promote the adoption of stronger risk management practices by the banking industry especially covering operational and credit risk.

· 31 December 2004 – The Transparency Directive was published on 31 December 2004 which updates parts of the existing EU Consolidated Admissions and Reporting Directive (CARD). The Transparency Directive sets minimum requirements for financial reporting and disclosure of major shareholdings for issuers hence enhancing transparency in EU capital markets.

· January 2005 – Insurance Mediation Directive is implemented by FSA by accepting the general insurance business under its wing.

· 18 June 2004 – FSA implements the EU Market Abuse Directive which is a framework of regulations on insider dealings, market manipulation in the EU and proper disclosure of information to the market.

· 2007 – FSA’s approach to regulation has shifted to principles-based and outcomes focused. The plan is to be more principles-based by 2008 than rules based.

· 2007 - Treating customers fairly (TCF) is an initiative launched by FSA as part of its drive on principles-based regulation for the financial firms in the retail sector. TCF provides six outcomes to the firms to gauge their progress on how to treat their customers. TCF marks a shift from rules specific regulation to principles-based regulation.

· July 2007 – EU published its draft proposal for Solvency 2 framework which replaces the existing Solvency 1 requirements. Solvency 2 defines EU wide capital requirements and risk management standards for the EU insurance industry.

· July 2007 - As a result of the Northern Rock crisis, some of the important recommendation made by the FSA Internal Audit Report included FSA senior management to have increased engagement with high impact firms; FSA to increase the rigor of its day to day supervision and FSA to increase its focus on prudential supervision, including liquidity and stress testing.

· September 2007 - FSA published its framework for recognizing industry guidance. While industry guidance or best practices are not made mandatory by FSA, if a breach of FSA principles is established, non-compliance to industry guidance can lead to an enforcement case.

· 1 November 2007 - Markets in Financial Instruments Directive (MiFID) was introduced which replaces the Investment Services Directive (ISD). MiFID extends the scope of ISD for financial institutions by including requirements covering conduct of business and internal organisation.

· 15 December 2007 - 3rd EU Money Laundering Directive replaces previous two directives and covers due diligence and PEP