The highest financial supervision authority in Great Britain is its Financial Services Authority (FSA) that is thought to be established on June 7 of 1985. Headquarter of the organization is in London. FSA's competence includes all investment, bank and financial companies running on the territory of Great Britain. From the end of XX century FSA received functions of the state's central bank in the field of supervision over financial market and banks. From October 31 0f 2004 FSA's regulating authorities also included mortgage, and from January 2005 it undertakes intermediate functions in the issue of regulating insurance companies.
Key tasks of the Financial Services Authority listed in the Financial Services and Markets Act:
- providing essential protection of rights of consumers of financial products;
- facilitating in public comprehension of financial processes and financial system;
- maintaining a high level of public trust towards national financial system;
- restraint of financial manipulations, anticipation of probable threats of financial market.
Main priority of FSA is creating and improving an efficient model of financial market, where retail consumers can conduct financial operations. Improving public financial competence is also an important element of FSA's activity.
Following activities fall under competence of FSA:
- Arranging and conducting transactions with capital investments;
- Creating of pension programs;
- Arranging and conducting operations on insurance market;
- Rendering consulting services regarding bank deposits;
- Emission of electronic money
- Creating of programs in the field of real estate operations.
Functionally, FSA does not depend on the British Government and is fully financed by the companies, which it supervises. While making management decisions, the board is guided by six main principles. 1. First of all, it is a common principle of legitimacy, which means that management of each separate firm is responsible for compliance of firm's business with all legislative requirements. It is management who must take care of internal control and risk management in organization. In this case participation of state authority in internal business of the company is minimized. 2. Principle of efficiency is in operation in every organization and declares that all resources must be utilized effectively. 3. Market participants are not subject to limitations for elaboration and launching new financial products and services. Thereby principle of innovations is observed. 4. Apart from that, FSA follows principle of proportionality implying that limitations imposed by authority must be proportional to the benefits expected as the result of such limitations. 5. Principle of competition is aimed to mitigating effects of unfair competition and maintaining equality of rights of market participants. The main tool of ensuring positive competition is diminishing regulating barriers for new companies. 6. Final principle involves international cooperation and in particular coordination with foreign bodies in the part of elaboration of common standards and monitoring activities of transnational corporations and markets.
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