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»Ê¹ÚÌåÓýapp Financial Services and Markets Act 2000

»Ê¹ÚÌåÓýapp business of the financial sector is carried on within the framework of the Financial Services and Markets Act 2000 (FSMA 2000) and related legislation, under which the Financial Services Authority (FSA) operates. »Ê¹ÚÌåÓýapp FSA combines the regulatory functions formerly exercised by a number of different regulators for banks, building societies, insurance companies and the like. For example, the Bank of England used to regulate the banking sector, but its role now is to act as the UK’s central bank.

»Ê¹ÚÌåÓýapp FSA has four regulatory objectives:

• maintaining confidence in the financial system;
• promoting public understanding of the financial system;
• protecting consumers;
• reducing financial crime.

In order to achieve these objectives, the FSA oversees the conduct of the certain types of firm, in the interests of maintaining stability in the financial sector and protecting consumers. »Ê¹ÚÌåÓýapp FSA does this by using its powers to permit ‘authorised personsâ€� to carry out ‘regulated activitiesâ€� (CFM14040). It also regulates specific bodies such as recognised investment exchanges and clearing houses.

»Ê¹ÚÌåÓýapp Financial Services Compensation Scheme

In addition to establishing the regulatory framework, FSMA 2000 set up the Financial Services Compensation Scheme. All deposit-takers contribute to this fund. If a firm goes out of business, the Scheme will pay out a maximum of £50,000 on deposit claims. For deposit claims against firms declared in default between 1 October 2007 and 6 October 2008, the maximum is £35,000. For deposit claims against firms declared in default before 1 October 2007, the maximum level of compensation is £31,700 (100% of the first £2000 and 90% of the next £33,000).