Taskforce to examine the need for UK financial sector business continuity legislation

Sir Andrew Large, deputy governor of the Bank of England, has been asked by the UK Treasury to establish a taskforce to examine the possible need for legislative powers in the event of major operational disruption to the UK financial system.
‘The Financial System and Major Operational Disruption’, a Green Paper published in February, asked if new statutory powers should be sought to assist in promoting order in the financial system in extreme circumstances of operational disruption. The taskforce has been asked to examine the issues arising from the consultation and to make final recommendations by February 2004. An interim report will be produced by November 2003.

Announcing the creation of the taskforce, Chief Secretary to the Treasury, Paul Boateng, said: “The Green Paper stimulated a great deal of debate and the responses received were encouraging. Given the international nature of financial services in the UK, the policy and legal issues involved are very complex. Therefore the task-force, comprising experts from government and industry, will examine the issues in detail.”

Sir Andrew Large added: “I welcome the opportunity to consult the markets on these difficult issues through the task-force and its working groups. Much has already been achieved in addressing business continuity issues in the financial services sector and we will need to consider carefully whether further powers are warranted and what else could be done.”

The terms of reference of the taskforce are:
To make recommendations on the need for and possible form of a legislative response to the threat of major operational disruption in the UK financial services sector, with particular regard to:
* The appropriateness and effectiveness of existing statutory powers, including the Banking and Financial Dealings Act 1971;
* The force majeure and other provisions included in private contracts;
* The need for new or amended powers;
* The suitability of the proposed suspension and direction powers set out in the consultation document; and
* The non-legislative measures already put in place by the authorities for dealing with major operational disruption.

•Date: 20th June 2003 • UK •Type: Article •Topic: BC general
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