The Financial Services and Markets Act (2000)
The Financial Services and Markets Act (FSMA) is an important piece of legislation, passed by Parliament in 2000. The purpose of the Act is to regulate the activities of those organisations that provide financial services, as well as the activities of financial markets themselves. The institution designed to carry out this work, the Financial Services Authority (FSA), was also established as a provision of the Act itself.
The Act was inspired by a desire to create legal standards for the protection of consumers in the financial arena. Aside from the necessity to offer security for these consumers, it was also thought that this would increase general confidence in the financial services sector amongst professionals and other organisations. Furthermore, the Act also helps to minimise the risk of financial crime, and to aid in its detection.
Statutory AuthorityThe Act established the Financial Services Authority as the regulator of the financial services industry. Prior to the Act, the industry had been self-regulating; the FSMA, however, gives the Authority statutory powers to arrive at, and enforce, decisions. In this way, the FSA is now referred to as a 'quasi-judicial' organisation; it has judicial powers, but is not a part of what is normally considered the British judiciary system.
The FSA, using the powers conferred on it by the FSMA, has the responsibility for regulating a very wide range of financial activities. Of most concern to the regular consumer is the FSA's role as regulator of collective investments; personal and stakeholder pension schemes; mortgage advice; mortgage contract arrangement; and investment management. Furthermore, the organisation is also responsible for the regulation of more specialised activities, such as the activities of Lloyd's of London, the insurance market.
Public InformationThe FSMA also gives the Authority responsibility for increasing public awareness and knowledge of the financial services industry. As a part of their efforts to discharge this responsibility, the 'Money Made Clear' website was established. This valuable resource includes general information about specific financial services; perhaps more importantly, however, it also offers information on individual firms that have encountered problems - for example, it gives details of firms that have ceased trading, or that have been fined or criticised by the FSA or another body.
As a regulatory organisation, the Financial Services Authority is not, in most cases, designed to accept individual complaints from consumers. In the majority of instances, consumers should make a complaint directly to the provider in question, followed by the Financial Ombudsman. The FSA does, however, consider complaints regarding the advertising of financial products or services, and contract terms. If your complaint concerns either of these, you should contact the FSA by telephone.