The Regulation of Financial Services

Comprehensive vocabulary flashcards detailing the UK financial regulatory framework, listing key authorities, legislative acts, and oversight bodies.

Financial Services and Markets Act 2000 (FSMA)

The primary legislation that brought together the regulation of all sectors of the UK financial services industry under one regulatory system.

Financial Policy Committee (FPC)

A committee within the Bank of England responsible for monitoring emerging risks to the financial system and providing strategic direction for the regulatory regime.

Prudential Regulation Authority (PRA)

A body within the Bank of England responsible for the stability and resolvability of systemically important financial institutions such as banks, building societies, and insurers.

Financial Conduct Authority (FCA)

A separate independent regulator responsible for conduct of business and market issues for all firms and the prudential regulation of smaller, solo-regulated firms.

Financial Ombudsman Service (FOS)

An independent body responsible for reviewing complaints from complainants who remain unsatisfied with the outcome provided by a financial firm.

Financial Services Compensation Scheme (FSCS)

A scheme responsible for providing compensation to customers in instances where a regulated entity is unable to meet its liabilities.

HM Treasury

The UK Government department responsible for formulating and implementing financial and economic policy to raise the rate of sustainable growth.

Monetary stability

One of the Bank of England's core purposes, defined by stable prices and an inflation target of $2\%$ CPI.

Financial stability

One of the Bank of England's core purposes, involving the detection and reduction of threats to the financial system as a whole.

Prudential Regulation Committee (PRC)

The governing body of the PRA established by the Bank of England and Financial Services Act $2016$ to sit alongside the FPC and MPC.

Passporting rights

Rights arising under EU single market directives that allow a regulated firm in one EEA State to carry out activities in another EEA State.

European Union (Withdrawal) Act 2018

The legislation that onshored EU legislation into UK law prior to $31$ December $2020$.

Markets in Financial Instruments Directive (MiFID)

EU legislation regulating firms providing services linked to 'financial instruments' such as shares, bonds, and derivatives.

Insurance Distribution Directive (IDD)

A directive aimed at strengthening policyholder protection and creating a level playing field for firms involved in the sale or administration of insurance.

Basel Accords

International agreements, such as Basel III, implemented via the CRD to ensure banks and investment firms hold enough financial resources to cover business risks.

Joint Money Laundering Steering Group (JMLSG)

A group that produces guidance to assist firms in the financial industry with complying with UK anti-money laundering and counter-terrorist financing legislation.

Financial Action Task Force (FATF)

An international organization that sets global standards for the fight against money laundering and terrorist financing.

Alternative Investment Fund Managers Directive (AIFMD)

A framework for monitoring and supervising risks posed by managers of alternative investment funds (AIFs) such as hedge funds and private equity.

Packaged Retail and Insurance-based Investment Products (PRIIPs)

Regulations designed to help investors understand and compare investment features through a short, consumer-friendly Key Information Document (KID).

Securities and Exchange Commission (SEC)

An independent US agency that regulates financial markets to protect investors and maintain fair, orderly, and efficient markets.

Competition and Markets Authority (CMA)

The UK's independent public body responsible for promoting competition and investigating mergers or markets to prevent anti-competitive behavior.

The Pensions Regulator (TPR)

The UK regulator of work-based pension schemes responsible for protecting member benefits and ensuring employer compliance with pension duties.

Information Commissioner’s Office (ICO)

The UK's independent public body set up to maintain information rights, data privacy, and enforce compliance with the UK GDPR and DPA $2018$.

Senior Managers and Certification Regime (SM&CR)

A framework explicit in ensuring senior managers assess business risks and maintain appropriate procedures for the fair treatment of customers.

Management Information (MI)

Data reports compiled by firms to measure trends, analyze sales, revenue, and complaints, and demonstrate the fair treatment of customers.

Sustainable Finance Disclosure Regulation (SFDR)

An EU standard for fund disclosures that many UK asset managers follow to provide appropriate information to investors regarding sustainability.