Financial Services Regulation in Practice

Abstract

This textbook provides an overview of the current landscape of financial services regulation in the UK. Following the financial crisis, the UK regulatory scene has undergone significant changes. This book explains the different functions and responsibilities of the various UK regulatory bodies, most notably the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The constitutions, objectives, and rules that govern the behaviour of these key UK regulatory authorities are examined. The fundamental concept of the ‘general prohibition’—which provides that no person may carry on a regulated activity in the UK unless authorised or exempt—is given a thorough treatment. The regulated activities covered by the general prohibition, and any exclusions (contained in the Regulated Activities Order (RAO)), are also considered. The standards required of firms and individuals are given comprehensive analysis: the FCA’s five main conduct of business sourcebooks are scrutinised, as is the increased regulator engagement with the regulation of individuals (specifically in relation to senior management and customer—facing staff). The key concept of passporting within the European Economic Area (EEA) is explained for firms based in the EEA and the UK. Both the prudential regulations imposed by UK regulators and the regulations on financial promotions are reviewed. The regulators’ role in relation to financial crime is analysed. The nature of the FCA and PRA’s powers of enforcement and supervision are discussed. Consideration is also given to the various ways in which consumers may obtain redress.