2.1 As explained in the previous chapter, the Future Regulatory Framework (FRF) Review was established to determine how the financial services regulatory framework needs to adapt to the UK's new position outside of the EU, and to ensure the framework is fit for the future. The government's view is that the existing framework has significant strengths and it has served the UK well for many years. As such, the government aims to build on those strengths rather than designing a new framework approach from scratch.

2.2 In particular, the government views the Financial Services and Markets Act 2000 (FSMA) architecture, as adapted to address the regulatory failures of the 2007-08 financial crisis, as continuing to be appropriate. This includes the existing regulatory institutions, their overall areas of responsibility and their powers for making rules, supervising firms and enforcing regulatory requirements. And as set out when establishing the FRF Review, the government is of the view that expert, independent regulators should continue to be a central part of the UK's approach to financial services regulation.

2.3 This consultation document therefore focuses on how the FSMA model of regulation can be built on to provide a regulatory framework that makes the most of opportunities provided by the UK's withdrawal from the EU and which will underpin a stable, innovative and internationally competitive UK financial services sector far into the future. This chapter explains the government's proposed blueprint for adapting the FSMA model and how the proposed approach will meet the objectives for the FRF Review as set out in the previous chapter.

The FSMA model