The financial services act 2012 : the recent overhaul of the United Kingdom’s financial regulatory structure

The Financial Services Act 2012 received Royal Assent on December 19, 2012 and many of its provisions came into force on January 24, 2013.1 The Act marks an extensive restructuring of the United Kingdom’s financial regulation regime by transferring the prudential regulation responsibilities of the FSA to a new Prudential Regulation Authority operating as a subsidiary of the Bank of England, and renaming the FSA as the Financial Conduct Authority ("FCA"). In addition, the Act introduces a Financial Policy Committee of the Bank of England and amends the corporate governance of the Bank to strengthen scrutiny and accountability. This article aims to summarise the most crucial reforms introduced by the new Act, to explain how the new structure is expected to work and to assess the new regime on the basis of past experience from the United Kingdom and internationally. The second part of the article offers a brief background to the Act. The third part analyses the changes introduced by the Act with respect to the structure, responsibilities and governance of the regulatory authorities. The fourth part concludes by offering a critical evaluation of the reform.