In recent news, both houses of the UK Parliament have passed the new legislation "Bank of England and Financial Services Act 2016," which aims to reform the UK's financial regulatory bodies and the Bank of England, with the goal of enhancing the management and reliability of the Bank of England. Prior to this, the bill had already received unanimous consent from both houses of the UK Parliament and is now in the royal "approval stage." Clients preparing for UK investment immigration are particularly concerned, so we will provide a detailed introduction to the new legislation in the UK.
The reform includes the complete integration of the Prudential Regulation Authority into the Bank of England. Additionally, under the new law, the Bank of England will be subject to oversight by the National Audit Office, but this will be limited to efficiency audits. Mark Carney, the Governor of the Bank of England, stated that the policy functions of the Bank of England must remain independent and cannot be compromised.
Furthermore, the legislation allows Carney to reduce the frequency of monetary policy meetings from 12 times a year to 8 times, aligning with the Federal Reserve and the European Central Bank's meeting frequency of once every six weeks. The Bank of England has indicated that the monetary policy meeting scheduled for October this year will be the first to be canceled. Subsequently, meetings in January, April, July, and October of 2017 will also be canceled.
In addition, the new legislation extends the senior management regime to all financial institutions, imposing a "duty of responsibility" on any individual serving as a senior manager. According to King & Wood Mallesons, the "duty of responsibility" will mean that the responsibilities assigned to the senior manager will be held accountable, and in the event of any issues, the negligent party may face disciplinary action.
Carney stated that the legislation further establishes the statutory status of the three main policy committees of the Bank of England: monetary, financial, and prudential, adjusts the schedule of monetary policy meetings, and further enhances the management and transparency of the Bank, ensuring that the Bank operates more effectively as a whole, serving the people of the UK by maintaining monetary and financial stability.