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What does the FSA do?
- Preserves confidence.
- Increases understanding.
- Provides protection for the consumer.
- Works to reduce financial crime.
The FSA has four aims:
- To preserve confidence in the UK’s financial structure – The FSA achieve
this by, for example, supervising financial exchanges and other market infrastructure
providers; carrying out market surveillance; and checking transactions.
- To improve the public’s understanding of the structure of the UK’s
financial industry – The FSA help people gain the understanding, capability
and skills needed to become knowledgeable consumers, so that they can more effectively
manage their financial affairs.
- To safeguard consumers – the FSA checks all applicants who wish to be members
of the FSA and aims to admit only those firms and individuals who meet the required
criteria (including honesty, capability and financial standing) to be involved in
regulated financial activity. When they are authorised, the FSA expect firms and
individuals to maintain the standards defined by the FSA. The FSA then examines how
far the businesses and individuals meet these standards. Where serious problems are
identified the FSA examines the situation and, if appropriate, disciplines or prosecutes
those responsible. The FSA can also use their powers to give funds back to clients.
- To help to lower financial crime – the FSA focuses on three main types of
financial crime: money laundering; fraud and dishonesty; and criminal financial wrongdoing
(such as insider dealing).
Whilst working towards these aims, the FSA notes of the following:
- The need to use resources in a cost effective and efficient way;
- The responsibility of the management in the businesses it regulates;
- The need to balance the curbs on financial firms with the benefits for clients
and industry of the FSA’s regulation
- The need to encourage innovation;
- The international nature of financial markets and services and the United Kingdom’s
competitive position; and finally
- The value of competition between financial businesses.
Regulating insurance intermediaries
Shortly the Financial Services Authority will also regulate the sale of general insurance
such as car insurance, house and contents insurance, and Life Insurance. This is a
result of the Insurance Mediation Directive from the European Parliament. This Directive
necessitates the formal regulation of general insurance brokers. The FSA is currently
at a discussion stage to ensure that the new regulations give appropriate safeguards
for clients whilst retaining the advantages of competition and innovation.
The Directive is expected to be put into practice in the UK in early 2005.
How to visit the FSA web site:
The FSA’s address is www.fsa.gov.uk
Please note : The information contained within the FAQ section has been written by Mortgage Protected Online
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