FSA’s consultation paper scraps plans to provide an Integrated Sourcebook

The Financial Services Authority (FSA) in the UK has published consultation paper 06/10, ‘Strengthening capital standards – restructuring the handbook’. The CP sets out the FSA’s proposals to revise the prudential structure of the handbook as a consequence of implementing the Capital Requirements Directive (CRD).

The FSA has proposed completing the new structure of the general prudential sourcebook (GENPRU) and the prudential sourcebook for banks, building societies and investments firms (BIPRU). The CP also includes proposals to create new prudential sourcebooks for insurers (INSPRU), mortgage firms and insurance intermediaries (MIPRU) and undertakings for the collective investment of transferable securities (UCITS) firms (UPRU).

The proposals replace the FSA’s earlier idea to provide an integrated sourcebook for all of the prudential requirements for firms in 2001. That proposal aimed to streamline all the requirements so rules could be easily streamlined across all sectors. The new proposal was created as a result of the imminent implementation of the CRD and the Markets in Financial Instruments Directive (Mifid), which made more specialised rules per sector necessary.

Firms will be first guided by the GENPRU, then get specific regulation in the appropriate dedicated sourcebook.

Currently, the FSA sets out its prudential requirements for firms in a series of interim prudential sourcebooks (IPRUs). The FSA aims to complete the first phase of restructuring by the end of this year and seeks comments from firms by August 25, 2006.

Click here to see CP 06/10 on the FSA’s website.

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