Financial services regulation: financial services

Updating author: Michael Sholem, Macfarlanes
Consultant editors: Nick Thorpe

Summary

• On 1 April 2013 the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) replaced the Financial Services Authority (FSA) as regulators and supervisors of most financial services markets, exchanges and firms. (See Background to the UK regulatory structure)
• The FCA and PRA are given their powers by the Financial Services and Markets Act 2000, as amended by the Financial Services Act 2012. (See Background to the UK regulatory structure)
• The FCA must follow a single statutory strategic objective, three statutory operational objectives and the principles of good regulation. (See The Financial Conduct Authority)
• The PRA has three statutory objectives to follow. (See The Prudential Regulation Authority)
• The FCA and the PRA are accountable to HM Treasury and Parliament and have a duty to consult with practitioners and consumers on any regulations they seek to bring in. (See Regulated activities and financial promotions)
• Any person or firm who engages in a regulated activity in the UK in the course of business must be authorised by the FCA and/or the PRA. (See Regulated activities and financial promotions)
• The FCA and the PRA inherited far-reaching powers from the FSA, and were given further powers under the Financial Services Act 2012. (See Powers of the FCA and the PRA)
• The FCA and the PRA regulate financial services firms using various policies of supervision and enforcement. (See FCA regulation, supervision and enforcement and PRA regulation, supervision and enforcement)
• The FCA is responsible for ensuring firms treat customers fairly and has powers to tackle unfair terms in consumer contracts. (See The FCA and the consumer)
• The FCA regulates consumer credit and second (or "subsequent") mortgages, following the abolishment of the Office of Fair Trading. (See Background to the UK regulatory structure)