Review of the Financial Services and Markets Act 2000

Financial Secretary, Stephen Timms MP, today announced the outcome of the Government’s review of the Financial Services and Markets Act 2000 (FSMA) following its first two years of operation.

The key results of the review are:

the Treasury will introduce a package of deregulatory reforms reducing the scope of FSMA. This should lead to more people being encouraged to save enough for retirement and more people being helped to manage their personal debt problems better;
other reforms should reduce a range of regulatory burdens on the financial services industry, increasing competition, and reducing costs. These reforms should also help small, innovative and potentially high-growth firms to attract the funding they need;
the Office of Fair Trading has assessed the impact of FSMA on competition. This assessment concluded that FSMA is likely to have had a positive effect on competition by improving how markets in the financial sector work, and that there are no indications of areas where FSMA itself might have had a significant adverse impact on competition;
the Financial Ombudsman Service will benefit from a range of developments. These relate to the treatment of cases with wider implications, the introduction of more transparency, and the treatment of cases which are passed from the Ombudsman to the FSA to take regulatory action; and
the FSA will complete a package of improvements which will reduce compliance burdens placed on the financial services industry. Measures include making the FSA handbook more user-friendly, improving the provision of FSA guidance, reducing consultation burdens, and rolling-out improved cost-benefit analysis.

Announcing the outcome of the review, Stephen Timms said:

“The range of deregulatory reforms and improvements resulting from this review should ensure that FSMA will continue to be regarded as a model of best practice internationally. Regulatory burdens will be reduced and I am confident that the UK will remain one of the most attractive places to conduct financial services business in Europe and globally.”

“The outcome of this review should heighten consumer confidence and have a positive tangible impact on many people’s lives. It should help people make sound decisions about investing in their financial well-being in retirement, and people with personal debt problems should benefit from more assistance in managing those problems. Consumers and investors should also benefit from a range of other measures being introduced.”

Notes for Editors

1. The consultation feedback statement summarising the outcome of HMT's February 2004 consultation on 'Financial Services and Markets Act two year review: Changes to secondary legislation' can be found here on the HMT public website. This page also provides links to all other material associated with the review.

2. Media enquiries should be addressed to Will Straw at the Treasury press office on 020 7270 4420.

3. Non-media enquiries should be addressed to the Treasury Correspondence and Enquiry Unit on 020 7270 4558 or by e-mail to public.enquiries@hm-treasury.gov.uk .

4. This press release and other Treasury publications and information are available on the Treasury website at www.hm-treasury.gov.uk. If you would like Treasury press releases to be sent to you automatically by e-mail you can subscribe to this service from the press release site on the website.