The Financial Services and Markets Act 2000 (FSMA 2000) has received criticism for not being an effective legislative framework for governing non-financial and financial law services. One particular criticism is that financial law services are not being actively monitored within the legal sector with many problems arising out of financial misfeasance within law firms.
Indeed it has been argued we need a better method of regulating financial law services in the UK. More specifically, if we consider the provisions of the FSMA, the effectiveness of ss 3 and 4 of the FSMA 2000 that has been scrutinised following the near collapse of Northern Rock. Many feel that the FSA has ‘implemented at times a burdensome and costly regulatory regime that has been implemented by a risk-based approach’. Financially and certainly in terms of financial law services, there are appears to be a lack supervision of financial law services across the whole of the UK. In fact, many believe that the offering financial law services have not been adequately resourced or highlighted within the scope of the FSMA 2000. This is in turn may show a lack of strength shown by the FSA to carry out due diligence. In many ways, this has highlighted how the FSA are more reactive than proactive to changes in the financial market.
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