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FCA Regulation

St Pauls Chambers frequently advise in cases brought by the FCA, usually in respect of the marketing and/or promotion of investment schemes or financial promotions. Representations are made in writing against proposed regulatory action, as financial penalties can often be prohibitive, based upon the profit to the promoters or the losses to consumers.

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The FCA

The FCA or Financial Conduct Authority is a private company funded by the imposition of fees and fines on the financial services industry firms which it regulates. The FCA regulates the conduct of around 60,000 retail and wholesale firms. The PRA is a division of the Bank of England and focuses on the micro-prudential regulation of around 1500 banks, building societies, credit unions, investors and insurers. The FOS is an adjudicator between a consumer and a financial service firm. There are a number of other regulators with the financial sector, for example, the Competition and Markets Authority (CMA) but the bulk of regulation is carried out by the FCA.

The FCA’s objectives and regulatory principles are set out in FSMA, as is the FCA power to make rules applying to authorised persons to promote the objectives. These rules are contained within the FCA Handbook which, despite its name, is very long and detailed. Within the Handbook are high-level Principles for Business (PRIN) of general application to regulated firms and Perimeter Guidance (PERG) to assist in understanding whether an activity falls within the FCA regulated sector. The FCA produces sourcebooks covering detailed business conduct requirements, for example, the Conduct of Business Sourcebook (COBS). There are numerous statutory instruments which also have application, for example, FSMA (Regulated Activities) Order 2001 and FSMA (Financial Promotion) Order 2005. As a minimum in each area of financial sector activity, the relevant applicable law will be found within the statute, the FCA Handbook, the high-level guidance, a sourcebook and statutory instruments.

FCA barristers at St Pauls Chambers are experienced in advising in cases brought by the Financial Conduct Authority (FCA). We advise at all stages of FCA regulation.

The Financial Services Act 1986

The current regulation of the financial system is the result of reform, following a succession of scandals within the banking sector. The Financial Services Act 1986 created a ‘light touch’ regulatory regime of Self Regulating Organisations (SROs) managed by the Security and Investments Board (SIB).

Financial scandal in the 1990s

Various financial scandals in the 1990s, of which the Maxwell pension fund and the collapse of Barings Bank were two high profile examples, ended light-touch regulation. The SIB was renamed the Financial Services Authority (FSA) in 1997 with new powers granted by the Financial Services and Markets Act 2000 (FSMA).

2008 banking crisis

Again, financial scandals including the 2008 banking crisis, PPI mis-selling, and LIBOR, encouraged further regulatory reform. The Financial Conduct Authority (FCA), the Prudential Regulation Authority (PRA), and the Financial Ombudsman Service (FOS) were created by the Financial Services Act 2012 which significantly amended FSMA.

FCA Barristers

Members of chambers have wide-ranging interests across the Financial Regulation sector. Our FCA barristers advise at all stages of FCA regulation, from authorisation and approval, through the investigation phase, to criminal prosecution and/or civil enforcement or action.

It is our experience that all clients benefit from obtaining legal advice at the earliest possible stage when dealing with any matter which may or may not require regulation by the FCA.

At St Pauls Chambers, our FCA barristers have extensive experience advising in cases brought by the FCA, most often concerning the marketing and/or promotion of investment schemes or financial promotions.