Financial Services Authority
The Financial Services Authority ("FSA") is an independent non-governmental body, quasi-judicial body and a company limited by guarantee that regulates the financial services industry in the United Kingdom. Its main office is based in Canary Wharf, London, with another office in Edinburgh. When acting as the competent authority for listing of shares on a stock exchange, it is referred to as the UK Listing Authority (UKLA), and maintains the Official list.
The FSA's Chairman and CEO are Callum McCarthy (to be replaced by Lord Turner of Ecchinswell from September 2008) and Hector Sants.
The statutory objectives are supported by a set
of principles of good regulation which the FSA must have regard to
when discharging its functions. These are:
Efficiency and economy: the need to use its resources in the most
efficient and economic way.
Role of management: a firm’s senior management is responsible for
its activities and for ensuring that its business complies with
regulatory requirements. This principle is designed to guard against
unnecessary intrusion by the FSA into firms’ business and requires
it to hold senior management responsible for risk management and
controls within firms. Accordingly, firms must take reasonable care
to make it clear who has what responsibility and to ensure that the
affairs of the firm can be adequately monitored and controlled.
Proportionality: The restrictions the FSA imposes on the industry
must be proportionate to the benefits that are expected to result
from those restrictions. In making judgements in this area, the FSA
takes into account the costs to firms and consumers. One of the main
techniques they use is cost benefit analysis of proposed regulatory
requirements. This approach is shown, in particular, in the
different regulatory requirements applied to wholesale and retail
Innovation: The desirability of facilitating innovation in
connection with regulated activities. For example, allowing scope
for different means of compliance so as not to unduly restrict
market participants from launching new financial products and
International character: Including the desirability of maintaining
the competitive position of the UK. The FSA takes into account the
international aspects of much financial business and the competitive
position of the UK. This involves co-operating with overseas
regulators, both to agree international standards and to monitor
global firms and markets effectively.
Competition: The need to minimise the adverse effects on
competition that may arise from the FSA's activities and the
desirability of facilitating competition between the firms it
regulates. This covers avoiding unnecessary regulatory barriers to
entry or business expansion. Competition and innovation
considerations play a key role in the FSA's cost-benefit analysis
work. Under the Financial Services and Markets Act, the Treasury,
the Office of Fair Trading and the Competition Commission all have a
role to play in reviewing the impact of the FSA's rules and
practices on competition.