Saracens Blog

Comment on the FSMA – is it fit to regulate financial law services?

The Financial Services and Markets Act 2000 (FSMA 2000 regulates and authorises members of the regulated sector which include banks, building societies,  etc. Indeed it is the Financial Services Authority (FSA) who keeps an eye over non financial and financial law services and enforces the regulations accordingly.

One of the key questions to consider when thinking about whether the FSMA is competent to regulate is how it regulates and supervises businesses offering financial law services. In many ways it can be argued that the FSMA 2000 has not been designed to combat the issues that are currently affecting firms offering financial law services. Indeed, s 6 of the FSMA 2000 requires the FSA to reduce financial crime by ensuring that financial institutions have systems and practices in place to protect them against being used as vehicles to launder money. This effects firms offering financial law services as it may be argued that the FSMA 200 is not stringent enough when it comes to combating such problems.

Furthermore, under s 4, the FSA has a statutory obligation to promote the public’s understanding of the financial system. When we consider the financial law services on offer, it seems very unclear whether enough is being done in the way of giving the public information on issues such as investment and other financial law services which the public and average consumer may need to be aware of.

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