The Financial Services Act 1986 (1986 c.60) was an Act of the

Parliament of the United Kingdom The Parliament of the United Kingdom is the supreme legislative body of the United Kingdom, the Crown Dependencies and the British Overseas Territories. It meets at the Palace of Westminster, London. It alone possesses legislative suprema ...

passed by the government of

Margaret Thatcher Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...

to regulate the financial services industry. The Act used a mixture of governmental regulation and self-regulation, and created a Securities and Investments Board (SIB) presiding over various new self-regulating organisations (SROs). It was superseded by the

Financial Services and Markets Act 2000 The Financial Services and Markets Act 2000c 8 is an Act of the Parliament of the United Kingdom that created the Financial Services Authority (FSA) as a regulator for insurance, investment business and banking, and the Financial Ombudsman Serv ...

Context

The Act may be thought of as an “emasculated Gower”. Professor

Laurence Gower Laurence Cecil Bartlett Gower (29 December 1913 – 25 December 1997) known as 'Jim' and universally credited as "LCB Gower" in his writings, was a lawyer and academic who was Vice Chancellor of the University of Southampton from 1971–79. ...

had been asked to produce a report on financial regulation, followed by a draft bill. He tended towards a tighter and more top-heavy regime. The Thatcher government became impatient with this process and pushed a second bill through in place of Gower with more emphasis on self-regulation but containing most of the regulatory content of the Gower bill. This relatively light approach to regulation followed a trend taking place in America under the Reagan administration.

Derivative products

Section 63 of the Act abolished any oversight of the courts on

derivative In mathematics, the derivative of a function of a real variable measures the sensitivity to change of the function value (output value) with respect to a change in its argument (input value). Derivatives are a fundamental tool of calculus. ...

contracts, which might otherwise have been considered speculative and thus contrary to the

Gaming Act 1845 The Gaming Act 1845 (8 & 9 Vict., c. 109) was an Act of the Parliament of the United Kingdom. The Act's principal provision was to deem a wager unenforceable as a legal contract. The Act received royal assent on 8 August 1845. Sections 17 and ...

. This exemption was not changed in the new

Repeal

The Act was repealed on 1 December 2001 by ''The Financial Services and Markets Act 2000 (Consequential Amendments and Repeals) Order 2001'' and was superseded by the

. Under this, the SIB and SROs were merged to form the Financial Services Authority (FSA), and self-regulation took a back seat.

Notes

References

* Rider, B., Chaikin, D. and Abrams, C. (1987). ''Guide to the Financial Service Act 1986''. CCH Editions. {{UK legislation United Kingdom Acts of Parliament 1986 Financial regulation in the United Kingdom Repealed United Kingdom Acts of Parliament 1986 in economics

Context

Derivative products

Repeal

See also

Notes

References