The Financial Services Agency

1
The Financial Services Agency

• Under the FSMA 2000 the FSA has the objectives to
  promote
• 1. Market confidence
• 2. Public awareness
• 3. Protection of consumers
• 4. Reduction of financial crime

2
The Financial Services Agency

• FSA must have regard to
• 1. Efficient and economic use of resources
• 2. Encourage self-regulation
• 3. The principal of proportionality
• 4. Encourage innovation
• 5. Maintaining UK competitiveness
• 6. Minimise adverse effects on competition
• 7. Facilitate competition

3
The Financial Services Agency

• FSA's roles include
• 1. Authorisation of firms
• 2. Approval of individuals (Approved person
  status)
• 3. Publication of regulations and guidance
• 4. Supervision of banks and financial
  institutions
• 5. Establishment and administration of a
  Financial Ombudsman Service
• 6. The establishment and administration of a
  Financial Services Compensation Scheme

4
The Financial Services Agency

• Individuals carrying on 'controlled functions'
  within an authorised firm need to seek 'approved
  person status'. Such persons must be 'fit and
  proper'.
• A person is carrying on Controlled functions if
  he or she
• 1.Exercises significant influence on the conduct
  of the authorised person's affairs
• 2. Has direct contact with actual or prospective
  users of the authorised person's services
• 3. Is dealing with customer's property.

5
Regulation

• The FSMA 2000 is intended to regulate
• 1. Deposit taking
• 2. Dealing in investments
• 3. Arranging deals in investments
• 4. Safekeeping and administration of assets
• 5. Managing investments
• 6. Giving investment advice
• 7. Establishing, operating and winding up
  collective investment schemes
• 8. Computer-based systems for investment
  instructions

6
Regulation

• Investments are defined as
• a) Securities (shares, debentures, government and
  public securities and units in unit trusts)
• b) Long term insurance contracts
• c) Options to buy or sell investments
• d) Futures
• e) Contracts for differences