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This chapter examines the statutory regime for the regulation of banks and banking in the UK. It first considers the development of UK banking supervision before discussing the traditional nature of bank supervision and the role and function of the Bank of England. It then reviews earlier and more recent crises in UK banking markets, including with regard to Northern Rock, and the circumstances surrounding the transfer of responsibility for bank supervision initially from the Bank of England to the Financial Services Authority (FSA) and then from the FSA to the Prudential Regulation Authority. It also analyses the main provisions contained in the Bank of England Act 1998, later amendments under the the Banking Act 2009 and the Financial Services Act 2012, and relevant sections of the Financial Services and Markets Act 2000 (FSMA). Finally, it explores the most recent changes announced with regard to ring-fencing, recovery planning, and resolution.

This chapter focuses on the regulatory framework for collective investment schemes (CISs). The Financial Services and Markets Act 2000 (FSMA) imposes a special regulatory regime on investment funds that fall within its wide definition of CIS, which has been placed within the scope of regulation since the enactment of the Financial Services Act 1986. The definition of CIS covers almost all types of investment funds with the exception of investment companies, investment trusts, and pooled investment special purpose vehicles. The chapter first considers the European directive for ‘undertakings for collective investment in transferable securities’ (UCITS) and the introduction of open-ended investment companies (OEICs) in the UK before discussing the European Union's directive for alternative investment funds and the regulatory categorisation of CISs in the UK. It also analyses the regulation of authorised unit trust schemes and the FSMA's ‘general prohibition’ and ‘financial promotion restriction’ provisions.

This chapter focuses on the regulation of consumer credit in the UK. It first traces the history of the regulatory framework for moneylending, with particular emphasis on the Consumer Credit Act 1974 (CCA 1974) and the Financial Services Act 2012, the latter of which led to the transfer of consumer credit regulation to the Financial Conduct Authority (FCA). It explains how regulatory powers over consumer credit (and hire) activity came to be exercised by the FCA under the Financial Services and Markets Act 2000 (FSMA) and how consumer credit advertisements (and quotations) are regulated under the FSMA's ‘financial promotion’ regime. It also reviews the special terminology used by the CCA 1974 such as credit, consumer credit agreement, and running account credit. Finally, it examines regulated activities relating to consumer credit and special regulatory control applicable to consumer credit.

This chapter explains how the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) exercise their disciplinary enforcement powers under the Financial Services and Markets Act 2000 (FSMA) to address breaches of regulatory rules and principles by firms and individuals. The FCA's approach to the exercise of its disciplinary powers may be described as being one of ‘credible deterrence’, whereas the PRA prefers early intervention and remedial action in advance of a potential issue arising, rather than exercising its disciplinary enforcement powers after the event. The chapter examines the power of the FCA and the PRA to impose sanctions, their enforcement decision making procedures, powers to investigate breaches of regulation, powers and procedure to conduct and settle enforcement proceedings, approach to financial penalties, and policy for third party rights. The role of the Upper Tribunal in hearing contested cases is also discussed.

This chapter examines the evolution of the European Union' financial services law and its impact on the development of financial services law in the UK, as it stands at the end of 2016, six months after the EU referendum. It first describes the evolving role and functions of the EU institutions, namely: the Council of Ministers, the European Commission, the European Court of Justice, and the European Parliament. It then considers the primary sources of EU law, including treaties, and the effects of the various changes in the Treaty of Rome. It also discusses the establishment of the single market in financial services and the moves to establish a banking union. Finally, it analyses the substantive financial services measures that have been adopted in the EU since the 1970s.

This chapter provides an overview of the current structure and operation of the main exchanges in operation in London as the financial centre of the UK. It details the most important changes and associated legal issues and challenges that arise with regard to market regulation, structure, and operation. It also covers exchange recognition, function, structure and ownership, governance, and conduct. This chapter discusses market and exchange evolution in terms of digital competition, financial innovation, capital role, and private investment, financial security, financial stability and financial integration, and global contribution. It highlights the responses to the recent significant market changes and policy issues.

This chapter focuses on the Financial Conduct Authority's (FCA) Handbook of Rules and Guidance and the Prudential Regulation Authority's (PRA) Rulebook. The FCA Handbook of Rules and Guidance and the PRA Rulebook are two of the most important products or physical expressions of the FCA and PRA's general functions with respect to financial services regulation: they are the primary consolidation of the rules, and (in the case of the FCA) guidance through which that regulator performs its particular functions. The chapter first explains what material goes into the FCA Handbook and the PRA Rulebook before providing an overview of the structure and content of each document. It then examines high-level standards in the FCA Handbook and the PRA Rulebook, along with the rise and fall of principles-based regulation in the UK. It also considers the processes governing the Handbook and Rulebook as well as the interpretation of both documents.

This chapter considers the development and nature of markets and exchanges, including their origin, evolution, expansion, structure, and function of markets and exchanges. It analyses the content and operation of financial markets and instruments, the relationship between capital and stock markets, and other financial markets. It also examines the structural and operational issues of the nature and function of markets and exchanges. This chapter reviews the nature and impact of Financial Technology (FinTech) and Regulatory Technology (RegTech). It refers to the general nature and impact of the global financial crisis and recent Coronavirus crisis, as well the shape and structure of the new international, regional, and national responses.

This chapter examines the regulatory procedures for handling consumer complaints involving financial services firms as well as the process of dispute resolution and compensation available to complainants. In particular, it discusses the role of the Financial Ombudsman Service (FOS) and the Financial Services Compensation Scheme (FSCS), introduced under the Financial Services and Markets Act 2000 (FMSA). It also considers the functions of the Financial Conduct Authority (FCA). The chapter first provides an overview of the DISP Rules, which contain the complaint handling requirements for firms, before describing major sources of complaints against financial services firms, including Payment Protection Insurance (PPI). It then analyses financial redress by the FCA in the form of restitution, injunctions, industry review, and a ‘qualifying parent undertaking’. It also looks at the statutory frameworks of the FSO and the FSCS.

This chapter examines the causes of action available to investors through the civil courts to resolve disputes with financial services firms. Under the Financial Services and Markets Act 2000 (FSMA), persons in their capacity as an investor have a range of statutory protections, for example where an investor has cause for complaint against a firm as to the very wisdom of entering into an agreement for a particular financial product. Complaints may be resolved through the Financial Ombudsman Service or, where the firm is impecunious, referred to the Financial Services Compensation Scheme. Alternatively, an investor may seek a remedy through the civil courts. The chapter considers the relevant provisions of Part 1 (Statutory Causes of Action) and Part 2 (Causes of Action in Common Law) of FSMA, focusing on the right of the investor to claim for breach of contract, tort of negligence, misrepresentation, and breach of fiduciary duty.