Regulators

The principal regulators in the UK financial services sector are now the Prudential Regulation Authority and the Financial Conduct Authority. The UK Listing Authority approves companies for stock exchange listing. The Financial Conduct Authority is responsible for the Financial Ombudsman Service and the Money Advice Service. Both authorities jointly oversee the Financial Services Compensation Scheme.

The Financial Conduct Authority regulates the conduct of business for financial services firms. It is also responsible for prudential regulation of investment firms and other financial service providers. A Prudential Regulation Authority is only responsible for larger credit institutions and investment firms.

The Financial Conduct Authority is independent in the conduct of its function. It is a company limited by guarantee established under the Financial Services and Markets Act 2000. It is responsible to the Treasury and, through it, is responsible to Parliament. The board is appointed by the Treasury. The majority are non-executive directors. The board sets its policy.

The minister and day-to-day responsibilities for the authority rest with the executive committee. The authority is independent of the government and is funded by the financial services directors, enjoying immunity from persecution while it acts in good faith and does not breach human rights legislation.

The Financial Conduct Authority is funded by levies on the financial services sector industry. Certain fees are paid in blocks, grouping firms together which carry out similar activities in regulatory terms. Firms may pay fees under one or more blocks depending on the scope of their authorization.

The central objective of the authority is to ensure that the relevant market functions well. The relevant market, for this purpose, includes the financial markets, markets for regulated financial services, and markets that otherwise require authorization on the part of participants.

The operational objectives of the FCA are to secure an appropriate degree of consumer protection, protect and enhance the integrity of the UK financial system, and promote effective competition in the interest of consumers in the market for regulated financial services. The results were obliged to address financial #[2:52].

In determining the degree of protection for consumers as may be appropriate, the authority is to have regard to the different risks involved, the different types of investments and transactions, differences in the experience and expertise of consumers, and the needs of consumers for obtaining information and for #[3:13] which is fit for purpose.

The general principle of consumers should take responsibility for their own decisions. Provision of principles that national services providers should provide consumers with the level of care that is appropriate, having regard to the degree of risk involved in relation to the investment or transaction and the capabilities of the consumer concerned. Different expectations that consumers may have in relation to different kinds of investments and transactions, information which the Consumer Financial Education Body has provided to the FCA. Information provided by the ombudsman.

In relation to the integrity of the financial system, this is to include its soundness, stability, resilience, its orderly function, its freedom from market abuse and financial crime, and transparency on price formation.

The competition objective is to take account of the needs of different consumers and their need for further information to enable them to make informed choices, ease with which consumers may use services, and the ease with which consumers who obtain services can switch. Ease of entrance of new markets and the extent to which competition encourages innovation.

New rules enable the SA to identify potential risks to consumers at an earlier stage through intervention, product intervention. It may direct firms to withdraw or amend misleading financial promotions and products. Where it leaves the product or future of the product may lead to significant consumer detriment.

The FCA has powers to make temporary product intervention rules to tackle specific products for types, features, and marketing practices. Although normally it must consult various bodies before making rules, it may make rules without consultation where delay would prejudice the interest of consumers.

Rules are for a maximum of 12 months allowing for consultation and an attempt to reach more permanent rules or a solution. Rules may be flexible as to whether they require futures to be changed, amended, planning, promotional elements, or outright ban.

The Prudential Regulation Authority is structured as set out in another chapter; it is a subsidiary of the Bank of England and is responsible for regulation of banks, insurance companies, and larger-scale investment firms in respect of prudential matters. The FCA remains responsible for conduct and consumer protection.

The objective of the PRA is to promote the safety and soundness of firms. It authorizes, the objective is to prevent the adverse effects of failure on the financial system and ensure the businesses conduct their affairs in a manner which avoids these risks. It is the objective of ensuring appropriate protection for policyholders in the insurance there.

The PRA uses risk assessment frameworks to manage financial stability. That is the effect of risk from stress or failure of the business and equate to it, including future capacity to generate capital to earnings, quality of its assets and management quality, risk management and governance.

The FSA Act 2000 as amended provides for regulatory principles to be applied by regulators including efficiency and economy, proportionality in terms of the burden or restriction imposed relative to the benefits, sustainable economic growth in the medium and long-term, consumer responsible principle, senior manager responsibility, business diversity to recognize openness and disclosure and transparency.

The Money Advice Service must evolve and separate from the FSA and is responsible for assisting consumers in understanding financial services and managing their finance. Its purpose is to raise awareness and enable consumers to have the necessary tools and support to allow them to make informed decisions in financial matters. This includes the ability to manage money, track finances, plan, and make informed decisions.

The service maintains a consumer website, produces fact sheets, key fact documents, and runs roadshows.

The result of targeting financial information and education at bodies who are not traditionally have benefited from it.

It has worked with the voluntary sector as part of the national strategy for financial capability. This involves developing partnerships and building financial capability in the rental market, social housing, social and health care disability, and other sectors.