Financial services regulatory

Individuals that perform controlled functions for financial services firms that carry on regulated activities in the UK such as their directors or partners are approved and regulated by the UK's Financial Conduct Authority (‘FCA'), under the UK's Financial Services and Markets Act ("FSMA") regime. The FSMA regime (as amended by the Financial Services Act 2012) has introduced a further regulator, the Prudential Regulatory Authority ('PRA') for dual-regulated firms such as deposit takers and insurers.

The immediate outcome of the banking crisis was the more "intrusive" and intensive policing of the FSMA regime by the FCA's predecessor (the FSA) in the UK, with the FSA seeking to make judgments on the judgments of the senior management of its regulated firms. This pro active regulatory approach has been reinforced with the UK's Financial Services Act 2012 giving the FCA additional powers to intervene and take action against the individuals that it regulates.

There has also 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 implementation of a ‘twin peaks' financial services regulatory structure have practical implications for all the individuals that currently are (and those that could be required to be) within the scope of financial services regulation in the UK.

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 credible deterrence to uphold standards of conduct, in particular the conduct of individuals and their integrity.

We work closely with individuals and their firms (our individual clients tend to be the senior management of FCA (and PRA) 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 FCA (and PRA) 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 FCA (and PRA) regulated firm
  • Providing ongoing regulatory advice in relation to the FCA (and PRA) Principles and Rules applicable to their FCA (and PRA) Authorisations and Approvals
  • Handling FCA (and PRA) Supervision and Enforcement inquiries and investigations that may affect them
  • Defending FCA (and PRA) 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/FCA regulated firms and their individuals on their FSA/FCA issues. He ensures our team has a unique insight into the:

  • Scope of the FSMA regime
  • FSMA controller requirements
  • FCA (and PRA) Handbook
  • FCA (and PRA) Authorisation and Approvals Fit and Proper regime
  • FCA (and PRA) ‘non routine' Approval applications
  • FCA (and PRA) Authorisation, Supervision and Enforcement Divisions and the interaction between them
  • FCA (and PRA) 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, Asian and BVI offices in providing an international as well as a national perspective, on and offshore.

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