ABSTRACT
As explained in the chapter 1 to this book, it is no longer feasible to speak of regulation in the m odem state in terms of an undifferenti ated and external source of interference in the operation of the markets. The institutions of regulation take one of a number of dif ferent and sometimes complex forms and this is never better illustrated than in relation to the regulation of financial services. Prior to the introduction in 1986 of the current regulatory structure, regulation of the industry was piecemeal and ad hoc, involving elements of self regulation, statutory regulation and, in some cases, no regulation at all.1 This situation was subject to reform in 1986 and replaced, for investment business, by a system of 'self-regulation under a statu tory umbrella'. However, this has not proved to be the optimum form of regulatory structure. Regulation has, in some cases, been insufficiently robust, insufficiently flexible to cope with a rapidly changing market-place, and the division of responsibilities between a number of regulators has proved inefficient and costly. This struc ture is being reformed via the Financial Services and Markets Bill, which was introduced in June 1999. It will, when passed, replace the system of 'self-regulation' with one of statutory regulation and will merge the functions of a number of current regulatory bodies into one 'super-regulator'.
