Practice Areas & Industries: Withers Bergman LLP

 




Financial Services Regulatory Return to Practice Areas & Industries

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Practice/Industry Group Overview

Financial services firms that carry on regulated activities in the UK and the individuals that perform controlled functions for those firms such as their directors or partners are currently regulated by the UK's Financial Services Authority (‘FSA'), the single regulator under the existing UK Financial Services and Markets Act ("FSMA") regime.

An immediate outcome of the banking crisis has been a more "instrusive" and intensive policing of the FSMA regime by the FSA in the UK, with the FSA seeking to make judgments on the judgments of the senior management of its regulated firms. The UK's Financial Services Act 2010 has given the FSA additional powers to take action against the firms and the individuals that it regulates. There has been greater international co-ordination and co-operation between national regulators in relation to policy and individual cases with the US's Dodd-Frank Act also providing the US regulators with greater powers and "reach".

The UK's Coalition Government's plans to move to a ‘twin peaks' financial services regulatory structure have implications for all the financial services firms and the individuals that currently are (and those that could be required to be) within the scope of financial services regulation in the UK. HM Treasury's consultation on a new approach to financial regulation: building a stronger system ends on 14 April 2011.

The FSA has transitioned to the new regulatory structure from 4 April 2011 with its current Supervision and Risk business units being replaced by a Prudential Business unit and a Consumer and Markets Business Unit. This anticipates the new Prudential Regulation Authority (PRA) and Financial Conduct Authority (FCA) being established as two separate entities in 2012. However, integrated executive and board governance will be maintained throughout the transition process.

The UK Government's decision to call one of the new regulatory bodies the Financial Conduct Authority is reflective of the FSA's enforcement policy of taking action to uphold standards of conduct, in particular the conduct of individuals.

We work closely with individuals and their firms (our individual clients are often the senior management of FSA regulated firms) in:

  • Scoping the extent that the FSMA regime applies to any activities and promotional activity that they may want to carry on in the UK
  • Establishing new financial products and carrying on services that comply with any applicable UK regulations
  • Applying for the appropriate FSA Authorisations and Approvals in relation to any regulated activities carried on in the UK, the performance of a controlled function and the exercise of significant influence as a controller of a FSA regulated firm
  • Providing ongoing regulatory advice in relation to the FSA Principles and Rules applicable to their FSA Authorisations and Approvals
  • Handling any FSA Supervision and Enforcement inquiries and investigations that may affect them
  • Defending any FSA Enforcement proceedings against them
  • Any related civil proceedings to regulatory actions
  • Considering the international regulatory dimensions especially in the US.

Harvey Knight worked with the FSA's Authorisation, Supervision and Enforcement Divisions for six years and was a FSA Handbook expert. Since his return to private practice, he has worked closely with FSA regulated firms and their individuals on their FSA issues. He ensures our team has a unique insight into the:

  • Scope of the FSA/FSMA regime
  • FSA/FSMA controller requirements
  • FSA Handbook
  • FSA Authorisation and Approvals Fit and Proper regime
  • FSA ‘non routine' Approval applications
  • FSA Authorisation, Supervision and Enforcement Divisions and the interaction between them
  • FSA investigation and internal decision making processes
  • Referrals to the independent Financial Services and Markets Tribunal
  • Interaction between the regulatory regime and common law
  • He and his team works closely with our US, European, Hong Kong and BVI offices in providing an international as well as a national perspective, on and offshore.