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24 Cards in this Set
- Front
- Back
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Tripartite authorities
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HM Treasury
Bank of England FSA |
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HM Treasury's responsibilities
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- Putting into effect govt's financial and economic policy
- Raise rate of sustainable growth - Achieve rising prosperity through creating economic and employment opportunities for all - Chairs UK Standing Committee on Financial Stability |
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Bank of England's responsibilities
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- Promote and maintain stable and effcient monetary and financial framework
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What is the Bank of England responsible for?
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- Settling of payments
- Functioning of UK markets - Provision of routine and emergency liquidity to banking system |
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Name the 2 core purposes of the Bank of England
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- Monetary stability - stable prices, confidence in currency
- Financial stability - detecting and reducing threats to financial system - |
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What is the FSA's role?
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To regulate the UK's financial services industry
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What statute does the FSA get its powers?
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The Financial Services and Markets Act 2000
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What are the FSA's stautory objectives?
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- Market confidence
- Public awareness - Consumer protection - Reduction of financial crime |
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The FSA must have a regard for...
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- Principles of good regulation - awareness of efficiency and economy
- role of management, proportionality, innovation, international character, competition |
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FSA's strategic aims
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- Promoting efficient and orderly and fair markets
- Helping retail consumers achieve a fair deal - Improving businesses capability and effectiveness |
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FINANCIAL SERVICES AND MARKETS ACT
Objectives |
1. Consolidating financial regulation
2. Establish FSA in 30/11/01 |
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Role of EU
1. Treaties 2. Legislation - secondary legislation |
- EU's primary legislation
- Combine binding legal agreement [regulations, directives, decisions] |
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Role of EU continued
3. Regulations |
- Apply to all member states
- Binding in entirety - Not approved by national parliaments |
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Role of EU continued
4. Directives |
- Binding on member states
- Method left to national authorities - |
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Role of EU continued
5. Decisions |
Fully binding
- Individual measures aimed at citizen or member state |
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Role of EU continued
6. Markest in Financial Instruments Directive [MIFiD] |
- Wider scope, replacing Investment Services Directive
- Greater degree of harmonisation - Facilitate cross border business - Capital requirements - Forms part of Financial Services Action Plan [FSAP] |
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Role of EU continued
7. Insurance Mediation Service [MID] |
- HMRC brought general and protection business under FSA
- Sets minimum standards across EU on sale and administration - Advisers subject to personal indemnity insurance 1,120,2000 euros per firm for single claim, 1,680,300 on aggregate |
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Role of EU continued
8. Capital Requirement Directive [CRD] |
Basel 1 [1988]
Basel 2 - more rsik sensitive and dovetail in with banks rik management practices - Implemented by CRD - Pillar 1 - minimum capital requirements - Pillar 2 - any additional capital for risks above Pillar 1 Pillar 3 firms publish details of risk |
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Role of EU continued
9. Third Money Laundering Directive [3MLD] |
- Common basis for implementing revised Financial Action TAsk Force [FATF] recommendations on money laundering
- FATF sets standards in fight against money laundering and terrorist financing |
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Role of EU
10. OFT |
- Ensure markets work well for customers - competition
- Activities * Enforcement of competition and consumer protection * Market studies * Improving awareness of good market practice * Review impact of FSA rules - if affect competition must investigate and report to HM Treasury, Competition Committee and FSA * Competition investigate and make own report and actions for FSA [HM Treasury give direction] * Responsible for operation of Consumer Credit Act |
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Role of EU
11. Competition Commission |
- Investigates mergers [25% or more market share], markets [prevent competition], regulated sectors [regulatory system not working effectively]
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Role of EU
12. The Pensions Regulator |
Aims
- Protect benefits under occupational and personal pensions - Reduce risk of compensation from PPF - Promote good administration * Fine individual £5k and company £50k for breach of law |
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Role of EU
13. Information Commissioner's Office [ICO] |
- Oversee Data Protection Act
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FSMA 2000
Additional Oversight |
1. Snr. Mgt.
- Take overall responsibility for how firm managed - Assess types of business undertaken and identify risks - Firms cannot contract out regulatory obligations |
