Member states must transpose, and firms should apply, the directive from the start of 2007. During 2007, credit institutions and affected investment firms can choose between the current Basel 1 approach and the simple or medium sophistication approaches of the new framework. The most sophisticated approaches will be available from 2008. From this date, all relevant EU firms must apply Basel 2.
The Treasury is directly responsible for two areas of implementation, where the Financial Services and Markets Act needs to be amended to enable the FSA to carry out its functions. Further details of the Treasury's implementation can be found at: www.hm-treasury.gov.uk
However, the rest of the CRD will be implemented through FSA rules. With respect to mortgage providers, the FSA will be responsible for providing the framework for application of the CRD rules to these activities. In February 2006, FSA published its second and final consultation paper (CP) setting out the latest policy developments for CRD implementation, along with the full set of draft Handbook text. In July 2006, FSA published its feedback statement to the extensive comments received on this CP. These can be found on the FSA's website: www.fsa.gov.uk
The FSA Board will be invited to make the bulk of the FSA rules implementing CRD at its 25 October meeting.