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Will regulation changes affect online accountants?

Will regulation changes affect online accountants?

Contractor accountants might be interested to hear that the government is planning to merge the Financial Reporting Council and the Financial Services Authority to form a companies commission like the Securities and Exchange Commission in the United States.

On Monday the Treasury published the proposal which forms part of their plan to reform UK financial regulation. The paper entitled ‘A new approach to financial regulation’ said that the government believes there is a strong case for merging the two bodies to create a new regulator with responsibility for the stewardship of primary market activity, audit, company reporting and corporate governance. The new regulator would become the responsibility of Vince Cable, the business secretary.

The document points out that currently there is no one institution that has the authority, responsibility or powers to monitor the entire system and respond to potentially destabilising trends. This failing became obvious during the recent financial crisis. The regulators didn’t fully identify the underlying problems that caused the credit crunch and once the first signs of trouble became apparent they were unable to cope.

At present, the FSA’s remit is to monitor and regulate global investment banks and small local financial advisers. The Bank of England is responsible for financial stability, although it has no tools to enforce it, and the Treasury is tasked with maintaining the legal and institutional framework.

The coalition plans to set up a Financial Policy Committee which will be housed in the Bank of England and will ensure the UK’s financial stability. The FPC will receive macro-prudential tools to enable it to deal with systemic risks to financial stability.

The government also proposes to set up a new consumer protection and markets authority which will look out for the interests of consumers and promote confidence in financial markets and services.

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Image: Four colors by Tambako the Jaguar

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