UK REGULATORY SYSTEM

UK Regulatory System

UK regulatory system

Structure and Objectives of UK Regulatory System

The United Kingdom has a unique legal system in the world and it is a case based system. It means that all of the decisions made in court are stood on earlier decisions and the lawyers have to quarrel with cases related to the one they are dealing. The regulatory system of United Kingdom is as old as London is one of the world's main financial centres since 600 years. It established as a main self-regulated system and was kept like that until the 1980's. This thing happened for good reasons, in which the most important one was self-interest.

For the current structure of United Kingdom regulatory system, at the moment, they have a 2 tier regulatory system to cope up with two types of change. There are a number of proposals for incremental change in the license modification process, and there are numerous features of the system which may usefully be tweaked to reduce uncertainty and costs. The more considerable changes are going to be made in the next twelve months through the granting of a right of appeal for decisions on industry code modifications in electricity and gas. No matter what is the size of basis of the change, the most important thing will be to manage it to protect the strong points of the system and at the same time reducing its usage cost (Briault 2010, 9).

Impact of Independent Commission on UK financial services industry

The definition of a new regulatory framework and financial market regulation, to mitigate or prevent the effect of financial crises, has materialised in 2010 in a series of reform proposals, inspired by the principles of coordination and cooperation internationally. According to the indications emerging from the G20 summit in London and Pittsburgh; both in Europe and the United States were approved measures to redesign the system of rules and controls on financial markets and intermediaries and to revise the structure of authority supervision. In addition, in the UK, an independent Commission (appointed by the Government), last year, issued a report which contained proposals for measures of capitalisation and vigilance rules which aimed at improving the competitiveness and stability of the banking system of UK.

Despite the reform measures (adopted or under study) in the various laws are inspired to pursue shared goals outlined in international summits, seem to emerge in some cases problems of interaction or compatibility between different rules or proposals for reform, for example on issues of capital requirements or criteria for identifying important financial institutions systemically. In the case of Dodd Frank Act, being first-level legislation, implementing regulations (current issue) will have a key role to avoid situations of competitive advantage or disadvantage between financial institutions only linked to regulatory differences (Brimmer 2011, 3).

Regulatory reform in the UK

The UK Government, in June 2010, established an independent commission with the aim to submit by September 2011. It was a study for the reform of the ...