Regulation  

Independent Scotland to have own FCA, FSCS and Fos

An independent Scotland will have its own financial regulators to monitor the “conduct and behaviour of firms in local markets” and ensure there is market competition whilst protecting consumers, the Scottish National Party has proposed.

A white paper on Scotland’s future, Your guide to an independent Scotland, proposes that the Scottish Financial Conduct Authority will work on a “closely harmonised basis” with UK regulators.

This framework, the paper states, will mean that firms will be able to provide financial products and services “no matter where they are based”. The paper discusses the regulators as operating a similar regime to “other EU states”, which ‘passport’ firms under other member state rules.

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However, the European Commission previously said that Scotland would have to apply to be a member of European Union which would take two years, meaning that EU passporting would not be available to firms.

The white paper also proposes have compensation schemes in place, with equivalent protection to that of the UK, meaning bank deposits will have protection of £85,000. As part of the framework for financial stability, compensation schemes will be funded by a proportionate industry levy as is currently the case across the country.

The Scottish government has also proposed extending the triple-lock on state pensions to increase by either inflation, earnings or 2.5 per cent, whichever is higher. It has also proposed introducing a new single-tier pension at £160 per week, higher than the UK’s £144 a week.

It has also been proposed to keep sterling in place, with the Bank of England Financial Policy Committee continuing to set macroprudential policy and identifying systemic risks.

The Treasury has previously rejected the idea that an independent Scotland would be able to continue to have a say in interest rate setting if it continued to use the pound, effectively meaning it would be using the currency as a foreign nation.

The referendum on independence will be held on 18 September 2014.