The Financial Services Bill

The Financial Services Bill had its second reading in the House of Lords on 15 March 2010.

The Bill’s many sections detail a new financial stability objective for the FSA, allow the FSA to prohibit or require disclosure of short selling, and strengthen disciplinary powers for the FSA, amongst other changes.

The proposals widen the FSA’s authority to prohibit short selling by removing an existing link that restricts the power of prohibition to cases of possible market abuse. In relation to strengthened disciplinary powers the Bill provides the FSA the ability to impose penalties on a person who has performed a controlled function without approval and also the capability to suspend individuals and firms for a set period as a disciplinary outcome.

Punishment is not the only area of gain – the FSA will have more authority to gather information and will be required to create remuneration policy rules for regulated firms.