New regulatory powers Designated activities regime Powers of the FCA under FSMA 2000
Section of 1B of FSMA 2000 requires the FCA to comply with a number of requirements when discharging its "general functions" under FSMA 2000. This includes acting in a way that is compatible with its strategic objectives and advancing one or more of its operational objectives. The FCA must also have regard to the regulatory principles in section 3B of FSMA 2000. The FCA’s general functions, specified in subsection (6) include the making of rules. Section 22 of FSMA 2000 provides for HM Treasury to specify in regulations activities where the person conducting them requires to be authorised by the FCA.
	Schedule 2 to FSMA 2000 sets out a non-exclusive list of examples of activities which require authorisation, which are set out in more detail in the Financial Services and Markets Act 2000 (Regulated Activities) Order SI 2001/544 ("the Regulated Activities Order"). There are many pieces of retained EU law which set the rules for a kind of activity, product, or conduct which are not FSMA 2000 regulated activities, and which apply to a broader range of entities than persons. As a result, the general rule-making powers of the FCA in relation to authorised persons under FSMA 2000 do not currently apply. When those areas of retained EU law are revoked under section 1 of the Act, the FCA would not, therefore, have a power to make rules in relation to those activities, in the absence of the provisions of the Act. FSMA 2000 also provides the FCA with a range of information-gathering and enforcement powers, again linked to the FCA’s general functions (see for example, Parts 11 and 14 of FSMA 2000).
	Where these powers are currently available for matters contained in retained EU law, this is sometimes enabled through statutory instruments specific to the particular matter, and sometimes through the Financial Services and Markets Act 2000 (Qualifying EU Provisions) Order 2013 31 (QUEPO). The QUEPO applies provisions of FSMA 2000 to retained EU law files listed within it. When an area of regulated activity becomes subject to designated activity regulations the corresponding retained EU law will be revoked, through commencing the revocation of section 1 of the Act in relation to the specific pieces of retained EU law, and the powers applied under the QUEPO no longer apply. The FCA would not, therefore, have access to those powers in relation to matters designated by HM Treasury under the new Part 5A of FSMA 2000, without the provisions for HM Treasury to enable powers of information-gathering and enforcement under the Act.