By 2012 The Financial Services Authority (FSA) will cease to exist as a separate body. The FSA role on regulation will be taken over by a new Prudential Regulation Authority (PRA), which will operate as a subsidiary of the Bank of England. It will carry out the prudential regulation of financial firms, including banks, investment banks, building societies and insurance companies.
The FSA’s responsibility for consumer protection and conduct regulation will be taken over by a new Consumer Protection and Markets Authority (CPMA). The CPMA will regulate the conduct of all firms; both retail and wholesale, including those regulated prudentially by the PRA, and will take a proactive role as a strong consumer champion. It will have a strong mandate for ensuring that financial services and markets are transparent in their operation.
The CPMA will regulate the conduct of every financial service business, whether they trade on the high street or trade in high finance. The CPMA will takeover the FSA's existing responsibility for the Financial Ombudsman Service (FOS) and oversee the newly created Consumer Financial Education Body (CFEB), which will play a key role in improving financial capability. The CPMA will also have responsibility for the Financial Services Compensation Scheme.