Financial Services Authority - Investment & Finance Definition
An independent, non-governmental organization, created in 1997, that regulates the financial services industry in the United Kingdom. The FSA has four main objectives:
- 1) Maintain confidence in the United Kingdom financial system by supervising exchanges, settlement houses, and other market infrastructure providers. The FSA also conducts market surveillance and monitors transactions.
- 2) Promote public understanding of the financial system so consumers can be informed and manage their financial affairs.
- 4) Reduce
financial crime, such as money laundering, fraud, and reduce criminal market
misconduct, such as insider dealing.
The FSA is financed by the financial services industry. The board of directors is appointed by the U.K. Treasury. The board consists of an executive chairman, three managing directors, and eleven non-executive directors (including a lead non-executive member, the deputy chairman). The board sets overall policy, but daily decisions and manage-ment of the staff is the responsibility of the executive chairman.
The Chancellor of the Exchequer announced financial services reform and the creation of a new regulator in May 1997. The Chancellor merged banking supervision and investment services regulation into the Securities and Investments Board (SIB), which changed its name to the Financial Services Authority in October 1997. In June 1998, the responsibility for banking supervision was transferred to the FSA from the Bank of England. The Financial Services and Markets Act, which received Royal Assent in June 2000 and was implemented on December 1, 2001, transferred to the FSA the responsibilities of several other organizations such as the Building Societies Commission, Friendly Societies Commission, Investment Management Regulatory Organization, Personal Investment Authority, Register of Friendly Societies and Securities, and Futures Authority.
The FSA also took on new responsibilities under the regulation reform process, including Mutual Societies Registration. The FSA is responsible for the registration and public records of about 9,500 industrial and provident societies, 3,000 societies registered under the Friendly Societies legislation, 700 credit unions, and around 70 building societies. It also has power under the Unfair Terms in Consumer Contract Regulations to take action to deal with unfair terms in financial services consumer contracts.
The FSA is responsible for regulating Lloyd’s Insurance Market and Recognized Overseas Investment Exchanges (ROIEs). The FSA is responsible for tackling market abuses.