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Memorandum from the Financial Services Authority (LAI 24)
This note is submitted in response to the Committee's request for information on the FSA's Register of regulated firms. Before turning to that particular issue, we provide some background on the FSA and its responsibilities.
The responsibilities of the Financial Services Authority
1. The Financial Services Authority (FSA) is an independent non-governmental body, given statutory powers by the Financial Services and Markets Act 2000 (FSMA). The FSA is accountable to Treasury Ministers and through them to Parliament. We are operationally independent of Government and are funded entirely by the firms we regulate.
2. FSMA gives us four statutory objectives:
· maintaining confidence in the financial system;
· promoting public understanding of the financial system;
· securing the appropriate degree of protection for consumers, taking into account the general principle that consumers should take responsibility for their decisions; and · reducing the extent to which it is possible for a business to be used for a purpose connected with financial crime.
3. We regulate most types of financial services firms, including banks, building societies, credit unions, insurance companies, financial advisers, stockbrokers, mortgage and insurance brokers. We also work in partnership with other regulators and authorities - for example, to tackle financial crime. We do not regulate consumer credit, including credit cards, second-charge loans and occupational pension schemes.
The FSA Register
4. The FSA Register is a public record of financial services firms, individuals and other bodies which fall under our regulatory jurisdiction as defined in the Financial Services & Markets Act 2000 (FSMA). Firms are regulated by the FSA as long as they continue to meet threshold conditions, which include having adequate capital.
5. Section 347 of FSMA sets out what the FSA must include on the Register of regulated firms (for example, the name of the firm, the regulated services the firm holds itself out as able to provide, a suitable business address for the firm andthe name of any approved persons carrying out controlled functions in the firm).Section 347 also requires us to include other information that we deem appropriate for the public record. Under this heading we include, for example, any publicly available disciplinary history of a firm or individual and the regulatory history of a firm or individual for the benefit of consumers and market participants.
6. The
FSA Register has information on all authorised firms currently doing business in
the
7. On
the front page of the Register, we advise
8. It is for investors to make their own judgments when choosing to invest money in an FSA regulated firm.
Local authorities and the FSA
9. Local authorities, in common with other organisations, are able to check whether an institution in which they are considering investing is an authorised deposit taker, by checking on the FSA Register. They do not have to contact the FSA to check the Register, as it is accessible from our website. We do not require local authorities, or any other user, to inform us when they perform searches on the Register. 10. We do not regulate the financial investments of local authorities and we expect local authorities to make their own judgements and investment decisions, taking professional advice as appropriate. The FSA does not provide specialist financial advice to firms, consumers or other market players such as local authorities. Generic financial advice is available on our consumer website, but this is designed specifically for individual consumers.
December 2008 |