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Competition and regulation in financial services markets

United Kingdom
30/11/1999
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On 9th November the Government announced that it would make important improvements to the competition regime in the Financial Services and Markets Bill. The changes will: · ensure that the FSA keeps to a minimum any distortionary effects of its regulation on competition; · require the FSA to consult on the economic costs of its rules. The FSA will also be expected to report annually on the effects of regulation on competition in the financial services market in the light of market developments; · provide that the Competition Commission, rather than Ministers, will take the final decision on whether a rule or practice is anti-competitive, and reach a view on whether the rules or practices are nevertheless justified; · narrow the exclusion from general competition law so that the conduct of financial services businesses is only excluded if it is required, urged or legitimised by FSA rules or practices; and · allow the Office of Fair Trading and the Competition Commission, when investigating complex monopolies, to consider and comment on any part played by the FSA rules. (HM Treasury Pre-budget Report: Nov 1999 10)

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