Legalize / United Kingdom / Public General Act

Financial Services and Markets Act 2000

Type Public General Act

Publication 2000-06-14

State In force

Department Statute Law Database

Source legislation.gov.uk

Reform history JSON API

Part I — The Regulator

The Financial Services Authority.

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The Authority’s general duties

The Authority’s general duties.

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The regulatory objectives

Market confidence.

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Financial stability

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Public awareness.

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The protection of consumers.

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The reduction of financial crime.

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Enhancing public understanding of financial matters etc

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Corporate governance

Duty of Authority to follow principles of good governance.

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Arrangements for consulting practitioners and consumers

The Authority’s general duty to consult.

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The Practitioner Panel.

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The Consumer Panel.

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Duty to consider representations by the Panels.

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Reviews

Reviews.

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Right to obtain documents and information.

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Inquiries

Cases in which the Treasury may arrange independent inquiries.

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Power to appoint person to hold an inquiry.

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Powers of appointed person and procedure.

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Conclusion of inquiry.

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Obstruction and contempt.

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PART 1A — The Regulators

CHAPTER 1 — The Financial Conduct Authority

The Financial Conduct Authority

1A

(1) The body corporate previously known as the Financial Services Authority is renamed as the Financial Conduct Authority.

(2) The Financial Conduct Authority is in this Act referred to as “the FCA”.

(3) The FCA is to have the functions conferred on it by or under this Act.

(4) The FCA must comply with the requirements as to its constitution set out in Schedule 1ZA.

(5) Schedule 1ZA also makes provision about the status of the FCA and the exercise of certain of its functions.

(6) References in this Act or any other enactment to functions conferred on the FCA by or under this Act include references to functions conferred on the FCA by or under—

(a) the Insolvency Act 1986,

(b) the Banking Act 2009,

(cza) the Financial Guidance and Claims Act 2018,

(czb) the Civil Liability Act 2018,

(czc) the Financial Services and Markets Act 2023,

(ca) the Alternative Investment Fund Managers Regulations 2013, ...

(d) a qualifying provision that is specified, or of a description specified, for the purposes of this subsection by the Treasury by order.

(e) regulations made by the Treasury under section 8 of the European Union (Withdrawal) Act 2018.

The FCA's general duties

1B

(1) In discharging its general functions the FCA must, so far as is reasonably possible, act in a way which—

(a) is compatible with its strategic objective, and

(b) advances one or more of its operational objectives.

(2) The FCA's strategic objective is: ensuring that the relevant markets (see section 1F) function well.

(3) The FCA's operational objectives are—

(a) the consumer protection objective (see section 1C);

(b) the integrity objective (see section 1D);

(4) The FCA must, so far as is compatible with acting in a way which advances the consumer protection objective or the integrity objective, discharge its general functions in a way which promotes effective competition in the interests of consumers.

(4A) When discharging its general functions in the way mentioned in subsection (1) the FCA must, so far as reasonably possible, act in a way which, as a secondary objective, advances the competitiveness and growth objective (see section 1EB).

(5) In discharging its general functions the FCA must have regard to—

(a) the regulatory principles in section 3B, and

(b) the importance of taking action intended to minimise the extent to which it is possible for a business carried on—

(i) by an authorised person or a recognised investment exchange, or

(ii) in contravention of the general prohibition,

to be used for a purpose connected with financial crime.

(6) For the purposes of this Chapter, the FCA's general functions are—

(a) its function of making rules under this Act (considered as a whole),

(aa) its function of making technical standards in accordance with Chapter 2A of Part 9A;

(b) its function of preparing and issuing codes under this Act (considered as a whole),

(d) its function of determining the general policy and principles by reference to which it performs particular functions under this Act.

(7) Except to the extent that an order under section 50 of the Financial Services Act 2012 (orders relating to mutual societies functions) so provides, the FCA's general functions do not include functions that are transferred functions within the meaning of section 52 of that Act.

(7A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8) “General guidance” has the meaning given in section 139B(5).

The consumer protection objective

1C

(1) The consumer protection objective is: securing an appropriate degree of protection for consumers.

(2) In considering what degree of protection for consumers may be appropriate, the FCA must have regard to—

(a) the differing degrees of risk involved in different kinds of investment or other transaction;

(b) the differing degrees of experience and expertise that different consumers may have;

(c) the needs that consumers may have for the timely provision of information and advice that is accurate and fit for purpose;

(d) the general principle that consumers should take responsibility for their decisions;

(e) the general principle that those providing regulated financial services should be expected to provide consumers with a level of care that is appropriate having regard to the degree of risk involved in relation to the investment or other transaction and the capabilities of the consumers in question;

(f) the differing expectations that consumers may have in relation to different kinds of investment or other transaction;

(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(h) any information which the scheme operator of the ombudsman scheme has provided to the FCA pursuant to section 232A.

The integrity objective

1D

(1) The integrity objective is: protecting and enhancing the integrity of the UK financial system.

(2) The “integrity” of the UK financial system includes—

(a) its soundness, stability and resilience,

(b) its not being used for a purpose connected with financial crime,

(c) its not being affected by contraventions by persons of Article 14 (prohibition of insider dealing and of unlawful disclosure of inside information) or Article 15 (prohibition of market manipulation) of the market abuse regulation,

(d) the orderly operation of the financial markets, and

(e) the transparency of the price formation process in those markets.

The competition objective

1E

(1) The competition objective is: promoting effective competition in the interests of consumers in the markets for—

(a) regulated financial services, or

(b) services provided by a recognised investment exchange in carrying on regulated activities in respect of which it is by virtue of section 285(2) exempt from the general prohibition.

(2) The matters to which the FCA may have regard in considering the effectiveness of competition in the market for any services mentioned in subsection (1) include—

(a) the needs of different consumers who use or may use those services, including their need for information that enables them to make informed choices,

(b) the ease with which consumers who may wish to use those services, including consumers in areas affected by social or economic deprivation, can access them,

(d) the ease with which new entrants can enter the market, and

(e) how far competition is encouraging innovation.

Competitiveness and growth objective

1EB

The competitiveness and growth objective is: facilitating, subject to aligning with relevant international standards—

(a) the international competitiveness of the economy of the United Kingdom (including in particular the financial services sector), and

(b) its growth in the medium to long term.

Interpretation of terms used in relation to FCA's general duties

Meaning of “relevant markets” in strategic objective

1F

In section 1B(2) “the relevant markets” means—

(a) the financial markets,

(b) the markets for regulated financial services (see section 1H(2)), and

(c) the markets for services that are provided by persons other than authorised persons in carrying on regulated activities but are provided without contravening the general prohibition.

Meaning of “consumer”

1G

(1) In sections 1B to 1E “consumers” means persons who—

(a) who use, have used or may use—

(i) regulated financial services, or

(ii) services that are provided by persons other than authorised persons but are provided in carrying on regulated activities, who

(b) who have relevant rights or interests in relation to any of those services,

(d) who have relevant rights or interests in relation to financial instruments , or

(e) who have rights, interests or obligations that are affected by the level of a regulated benchmark ; or

(f) in respect of whom a person carries on an activity which is specified in article 89G of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (seeking out etc claims) whether that activity, as carried on by that person, is a regulated activity, or is, by reason of an exclusion provided for under the 2001 Order or the 2000 Act, not a regulated activity.

(2) A person (“P”) has a “relevant right or interest” in relation to any services within subsection (1)(a) if P has a right or interest—

(a) which is derived from, or is otherwise attributable to, the use of the services by others, or

(b) which may be adversely affected by the use of the services by persons acting on P's behalf or in a fiduciary capacity in relation to P.

(3) If a person is providing a service within subsection (1)(a) as trustee, the persons who are, have been or may be beneficiaries of the trust are to be treated as persons who use, have used or may use the service.

(4) A person who deals with another person (“B”) in the course of B providing a service within subsection (1)(a) is to be treated as using the service.

(5) A person (“P”) has a “relevant right or interest” in relation to any financial instrument if P has—

(a) a right or interest which is derived from, or is otherwise attributable to, investment in the instrument by others, or

(b) a right or interest which may be adversely affected by the investment in the instrument by persons acting on P's behalf or in a fiduciary capacity in relation to P.

Further interpretative provisions for sections 1B to 1G

1H

(1) The following provisions have effect for the interpretation of sections 1B to 1G.

(2) “Regulated financial services” means services provided—

(a) by authorised persons in carrying on regulated activities;

(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) by authorised persons in communicating, or approving the communication by others of, invitations or inducements to engage in investment activity or to engage in claims management activity;

(d) by authorised persons who are investment firms, or qualifying credit institutions, in providing relevant ancillary services;

(e) by persons acting as appointed representatives;

(f) by payment service providers in providing payment services;

(g) by electronic money issuers in issuing electronic money;

(h) by sponsors to issuers of securities;

(i) by primary information providers to persons who issue financial instruments.

(3) “Financial crime” includes any offence involving—

(a) fraud or dishonesty,

(b) misconduct in, or misuse of information relating to, a financial market,

(d) the financing of terrorism.

(4) “Offence” includes an act or omission which would be an offence if it had taken place in the United Kingdom.

(5) “Issuer”, except in the expression “electronic money issuer”, has the meaning given in section 102A(6).

(6) “Financial instrument” has the meaning given in section 102A(4).

(7) “Securities” has the meaning given in section 102A(2).

(7A) “Regulated benchmark” means a benchmark, as defined in section 22... (6A), in relation to which any provision made under section 22(1A)...(c) has effect.

(8) In this section—

“electronic money” has the same meaning as in the Electronic Money Regulations 2011;

“electronic money issuer” means a person who is an electronic money issuer as defined in regulation 2(1) of the Electronic Money Regulations 2011 other than a person falling within paragraph (f), (g) or (j) of the definition;

“engage in claims management activity” has the meaning given in section 21;

“engage in investment activity” has the meaning given in section 21;

“financial instrument” has the meaning given in section 102A(4);

“payment services” has the same meaning as in the Payment Services Regulations 2017;

“payment service provider” means a person who is a payment service provider as defined in regulation 2(1) of the Payment Services Regulations 2017 other than a person falling within paragraph (i) or (j) of the definition;

“primary information provider” has the meaning given in section 89P(2);

“relevant ancillary service” means any service of a kind mentioned in Part 3A of Schedule 2 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 the provision of which does not involve the carrying on of a regulated activity;

“sponsor” has the meaning given in section 88(2).

Meaning of “the UK financial system”

1I

In this Act “the UK financial system” means the financial system operating in the United Kingdom and includes—

(a) financial markets and exchanges,

(b) regulated activities (including regulated claims management activities), and

Modifications applying if core activity not regulated by PRA

1IA

(1) If and so long as any regulated activity is a core activity (see section 142B) without also being a PRA-regulated activity (see section 22A), the provisions of this Chapter are to have effect subject to the following modifications.

(2) Section 1B is to have effect as if—

(a) in subsection (3), after paragraph (c) there were inserted—

(d) in relation to the matters mentioned in section 1EA(2), the continuity objective (see section 1EA).

, and

(b) in subsection (4), for “or the integrity objective,” there were substituted “, the integrity objective or (in relation to the matters mentioned in section 1EA(2)) the continuity objective,”.

(3) After section 1E there is to be taken to be inserted—

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