The Financial Services Act 1986 (1986 c.60) was an Act of the Parliament of the United Kingdom passed by the government of Margaret Thatcher to regulate the financial services industry.[1] The Act used a mixture of governmental regulation and self-regulation, and created a Securities and Investments Board (SIB) presiding over various new self-regulating organisations (SROs). It was superseded by the Financial Services and Markets Act 2000.
 | |
| Citation | 1986 c. 60 |
|---|---|
| Territorial extent | England and Wales, Scotland, Northern Ireland |
| Dates | |
| Royal assent | 7 November 1986 |
| Repealed | 1 December 2001 |
| Other legislation | |
| Repealed by | The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001 |
Status: Repealed | |
| Text of statute as originally enacted | |
Context edit
The Act may be thought of as an “emasculated Gower”. Professor Laurence Gower had been asked to produce a report on financial regulation, followed by a draft bill. He tended towards a tighter and more top-heavy regime. The Thatcher government became impatient with this process and pushed a second bill through in place of Gower with more emphasis on self-regulation but containing most of the regulatory content of the Gower bill.[2]
This relatively light approach to regulation followed a trend taking place in America under the Reagan administration.[3]
Derivative products edit
Section 63 of the Act abolished any oversight of the courts on derivative contracts, which might otherwise have been considered speculative and thus contrary to the Gaming Act 1845.[4] This exemption was not changed in the new Financial Services and Markets Act 2000.[5]
Repeal edit
The Act was repealed on 1 December 2001 by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001[6] and was superseded by the Financial Services and Markets Act 2000. Under this, the SIB and SROs were merged to form the Financial Services Authority (FSA), and self-regulation took a back seat.
See also edit
Notes edit
- ^ Rider et al.
- ^ Rider et al, pp. 13-18.
- ^ For background see: Paul Krugman, 'Reagan Did It' (31 May 2009) The New York Times
- ^ Schwartz, R. J.; Smith, C. W. (1997). Derivatives Handbook: Risk Management and Control. Wiley. pp. p.183. ISBN 0471157651.
- ^ Section 412 of the 2000 Act.
- ^ "The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001". Statutory Instrument 2001 No. 3649. Office of Public Sector Information. 9 November 2001. Retrieved 30 October 2009.
References edit
- Rider, B., Chaikin, D. and Abrams, C. (1987). Guide to the Financial Service Act 1986. CCH Editions.