The FSA has today published its final rules for financial groups which span both the banking and investment sectors and the insurance sector.
The most significant changes that have been made to the proposed rules published in CP204 are the amending of the requirements under which a firm should notify the FSA that it is, or has ceased to be, a conglomerate, the addition of a flowchart that provides guidance to firms to help them identify whether they are a conglomerate and what sort of conglomerate they are, and confirmation for insurance groups that surplus assets in an unregulated financial institution that is part of the group can be used in the group capital calculation.
FSA director of wholesale and prudential policy Michael Folger says: “The final rules that we have published today mark an important step forward in ensuring the financial soundness of large complex financial groups. A growing number of such groups operate across different sectors within the financial services industry, and across national borders. These rules will enable us to regulate on the basis of the whole group, rather than regulating different sectors of the business independently of each other. And applying these new requirements will promote greater co-operation between international regulators.”