The FSA is an independent non-governmental body, given statutory powers by the Act. The FSA is a company limited by guarantee and financed by the financial services industry. A Board appointed by HM Treasury governs it.
The contact details for the FSA are 25 The North Colonnade, Canary Wharf, London E14 5HS, telephone: 020 7676 1000, website: www.fsa.gov.uk.
Under the FSA86 the Securities and Investments Board (SIB) was established as a regulator of regulators. The SIB formally changed its name to the FSA in October 1997. Under the Act the FSA is now the single statutory regulator responsible for regulating deposit taking, insurance and investment business.
The FSA has taken over the regulatory responsibilities of the self-regulating organisations (see Annex C). The FSA has also been give the power to regulate the banking and insurance industries. The responsibilities of the Building Societies Commission, the Friendly Societies Commission and the Registry of Friendly Societies have been transferred to the FSA (see Annex C).
The FSA has a single handbook of rules and guidance, which governs all regulation, from authorisation, supervision and enforcement to compensation and the conduct of business. The FSA’s handbook is available on the FSA website, www.fsa.gov.uk.
The duties and responsibilities of the FSA are:
- Authorisation or approval of all firms (or individuals) before they can carry on a regulated activity unless the firm/person is exempt from regulation under the Act. A person is an authorised person if it has been granted specific permission to carry on regulated activities by the FSA (see Parts 3 and 4);
- Supervision and regulation of all authorised persons. The FSA is empowered to make rules and to issue guidance and codes in relation to a wide variety of matters, including those which govern the conduct of business by authorised persons. The FSA supervises and regulates:
- Deposit takers, e.g. banks and building societies.
- Insurance companies.
- Investment firms (including professional firms e.g. lawyers and accountants who carry on mainstream investment business such as direct advice on investment products).
- Recognised Investment Exchanges e.g. organised markets on which member firms can trade investments such as equities and derivatives. The London Stock Exchange and the London Metal Exchange are examples of recognised investment exchanges.
- Clearing houses.
- Lloyd’s insurance market (see paragraph 80.45).
- Credit unions.
Enforcement. The FSA has great investigatory and disciplinary powers which may be
- exercised in relation to authorised persons who have acted in breach of the rules or other requirements of the Act. The FSA also has criminal prosecution powers including powers to prosecute persons who engage in regulated activities without authorisation (see Part 6);
- Role of the United Kingdom Listing Authority. The FSA acting as the ‘competent authority’ responsible for the maintenance of the official list, is referred to as the UKLA. The official list is the UKLA’s list of all listed securities. The UKLA reviews and approves all listing particulars and prospectuses which companies put together to have their securities admitted to the official list. The UKLA also approves certain other documents prepared by listed companies, such as acquisition and disposal circulars. The UKLA has the power to impose a financial penalty on a listed company or director of a listed company where the listing rules have been broken.
- Authorisation and recognition of certain collective investment schemes (see Part 5). The Act itself governs the operation and promotion of collective investment schemes.
- Compensation scheme. Under the Act, a new statutory compensation scheme was established by the FSA, which is operated by the Financial Services Compensation Scheme. The FSCS can pay compensation, up to set limits, to eligible consumers for a failure of any authorised firm concerning investment business, deposits or contracts of insurance. Annex D provides details of the compensation limits. The money used to pay the compensation comes from charges levied on authorised firms. The FSCS took on the work of the existing compensation schemes and is now the single point of contact for compensation (see paragraph 80.40). The FSCS replaced the compensation schemes detailed in Annex E. The compensation scheme is divided into three sub-schemes: Accepting deposits, Investment business and Insurance business.
Ombudsman service. A single Ombudsman was established under the Act to replace eight separate ombudsman schemes which were in operation prior to the Act: the Banking
Ombudsman, the Building Societies Ombudsman, the Insurance Ombudsman, the Office of the Investment Ombudsman, the Personal Insurance Arbitration Service, the PIA Ombudsman Bureau, the SFA Complaints Bureau and Arbitration Services and the FSA Independent Investigator. The Ombudsman is operationally independent of the FSA but it is the FSA which appoints the Ombudsman board. The function of the Ombudsman is to provide a quick , informal, flexible, cost effective, accessible and efficient dispute resolution service with the power to order firms to pay fair compensation for loss and damage. The address for the Ombudsman is South Quay Plaza, 183 Marsh Wall, London E14 9SR, telephone: 0845 0801800, website: www.financial-ombudsman.org.uk
Notes: [Part III and IV] [Part X] [Part XVIII] [Part XVIII] [Part XIX] [Part XI and XIV] [Part VI] [Part XVII] [Part XV] [Part XVI]
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