An overview of the Financial Services Act 2012
The Financial Services Act 2012 is an act of parliament that introduced and implemented a regulatory framework design to replace the Financial Service Authority with three new regulatory bodies:
- Financial Conduct Authority (FCA) – An agency assigned with the task of maintaining the integrity of financial markets and regulating retail and wholesale financial firms that offer services to consumers.
- Prudential Regulation Authority (PRA) – A part of the Bank of England responsible for the supervision and regulation of banks, insurers, building societies, major investment firms, and credit unions. In essence, it sets the standards for financial firms and monitors the conduct of each individual firm.
- Financial Policy Committee (FPC) -- A committee modelled after the Monetary Policy Committee, given the responsibility of monitoring economic activity in the United Kingdom. Any risks identified by the committee are passed on to the PRA for further investigation.
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