Financial Services Act 1986

Financial Services Act 1986
	United Kingdom Parliament
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Repealed	1 December 2001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Repealed by	The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001
Status: Repealed
Text of statute as originally enacted
Revised text of statute as amended

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 It was superseded by the Financial Services and Markets Act 2000.

Context

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

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

The Act was repealed on 1 December 2001 by The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001[6] and was superseded by the Financial Services and Markets Act 2000.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.

Notes

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 2009-10-30.

References

Rider, B., Chaikin, D. and Abrams, C. (1987). Guide to the Financial Service Act 1986. CCH Editions.

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[1] Rider et al.

[2] Rider et al, pp. 13-18.

[3] For background see: Paul Krugman, 'Reagan Did It' (31 May 2009) The New York Times

[4] Schwartz, R. J.; Smith, C. W. (1997). Derivatives Handbook: Risk Management and Control. Wiley. pp. p.183. ISBN 0471157651.

[5] Section 412 of the 2000 Act.

[6] "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 2009-10-30.