Describe the key features of UK and EU nancial service legislation and regulation likely to inspire investor condence.
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ellouise1997hotmailcom (student)
I am working as a trainee TV journalist for ITV. ITV are planning to run a feature article on financial services that they would like my help on. My feature article will include and describe key features of UK and EU financial service legislation and regulation likely to inspire investor confidence.
Investor confidence is likely to improve due to legislations. There are many legislations that can help inspire investor confidence in the form of Banking Act 1987 and Building Societies Act 1986. The Banking Act removes the barriers to competition in financial services, going towards a ‘one-stop financial service shop’ which measures capital base to minimise possibility of banking failures. The Buildings Societies Act is an act of Parliament of the UK governing building societies. It removed particular restrictions on the range of services they could offer so they could compete with banks. They could now offer loans, cheque accounts, exchange currencies, provide stockbroking services and much more. The Building Societies Commission was set up to supervise the activities of the societies which were allowed to become public limited companies. Both legislations both affect the way they operate and must run in line with the legislations.
Regulatory bodies also inspire investors in the UK. There are many regulatory bodies including Financial Conduct Authority (FCA). FCA aim to make sure that financial markets work well so that consumers get a fair deal. This means that they ensure that the financial industry is run with honesty, first’s product customers with appropriate products and services and customers can trust that the firm has their best interests at heart.
Secondly, Prudential Regulatory Authority (PRA) is another regulatory body. PRA was created as part of the Financial Services Act (FSA) and is responsible for the practical regulation and supervision of many banks, building societies, credit unions, insurers and major investment firms. They ensure than there is a general objective to promote safety of the firms it regulates, an objective specific to insurance firms, to contribute to the securing of appropriate protection for those who will become an insurance policyholder, lastly, an objective to facilitate effective competition.
Moreover, Mortgage Code Compliance Board (MCCB). The role of the mortgage code compliance board is to ensure that customers are fully informed and adequately protected when taking out a mortgage. All lenders registered with the board must adhere to the standards set out in the mortgage code.
Furthermore, General Insurance Standards Council (GISC) is an independent organisation which was set up to regulate the sales, advisory and service standards of members. Its purpose is to make sure that insurance customers are treated fairly.
Occupational Pension Regulatory Authority (OPRA) is a non-departmental public body which holds ...
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Moreover, Mortgage Code Compliance Board (MCCB). The role of the mortgage code compliance board is to ensure that customers are fully informed and adequately protected when taking out a mortgage. All lenders registered with the board must adhere to the standards set out in the mortgage code.
Furthermore, General Insurance Standards Council (GISC) is an independent organisation which was set up to regulate the sales, advisory and service standards of members. Its purpose is to make sure that insurance customers are treated fairly.
Occupational Pension Regulatory Authority (OPRA) is a non-departmental public body which holds the position of the regulator of work-based pension schemes. The clear set of aims include, improve confidence in work-based pensions, reduce risk of situations arising that may lead to claims of compensation, promote good administration of work-based pension schemes and to maximise employer compliance with employer duties and certain employment safeguards.
Lastly, Her Majesty's Revenue and Customs is a non-ministerial department of the UK Government responsible for the collection of taxes, the payment of some forms of state support, and the administration of other regulatory rules including the national minimum wage. They have have 3 strategic objectives. Maximise revenues, Transform tax and payments for customers and design and deliver a professional, efficient and engaged organisations.
In the UK there is also Consumer Protection acts which contribute to inspire investor confidence. First is Consumer Credit Act. This act is a piece of legislation which regulates consumer credit and consumer hire agreements. These agreements include personal loans, hire-purchase agreements, credit cards and store cards. The act regulates content and enforcement of agreements and provides for rights and obligations for both consumers and traders, requires that traders who make use of credit facilities obtain a consumer credit licence from the Office of Fair Trading, provides ‘truth in lending’ by showing the total cost of credit in the form of the Annual Percentage Rate, sets out procedures to be used in the event of default, termination or early settlement of an agreement and early settlement of an agreement and gives courts power to grant relief to consumers who have entered overpriced credit transactions.
Data protection is another consumer protection. This act defines UK law on the processing of data on identifiable living people. It is the main piece of legislation that governs the protection of personal data in the UK. The Data Protection Act creates rights for those who have their data stored, and responsibilities for those who store, process or transmit such data. The person who has their data processed has the right to view the data an organisations holds on them, request that incorrect information be corrected, require that data is not used in any way that may potentially cause damage or distress and require that their data is not used for direct marketing.
The Supply of Goods & Service Act no longer applies in UK law. This has been replaced by the Consumer Rights Act which gives you rights if something goes wrong with a service you pay for. The Consumer Rights Act introduces a 30 day period to get a refund on your product, after one failed attempt by the retailer to repair or replace a faulty item, you're entitled to ask for a refund or price reduction, no deductions from refunds and digital content rights which gives consumers rights in relation to online digital content that is paid for such as films or music.
The Advertising Standards Authority (ASA) is the self-regulatory organisation (SRO) of the advertising industry in the United Kingdom. Its role is to regulate the content of advertisements, sales promotions and direct marketing in the UK by investigating complaints made about ads, sales promotions or direct marketing, and deciding whether such advertising complies with its advertising standards codes.
Finally, businesses who operating in the UK also have to abide by EU Legislation and Directives to inspire investor confidence. The aims of EU legislation is to increase market freedom by allowing credit institution, insurance companies and investment firms to carry out business within the EU without needing separate authorisation; this is also known as Single Licence Concept. This is achieved using a number directives that needs to be implemented. The first EU legislation is Second Bank Directive which gives permit to credit institutions to carry out any activities in the directive in the EU if it permitted in their home state.
Third Life Directive also known as the Life Framework Directive has provisions that were incorporated into the insurance companies act. This directive introduced the concept of a single line licence for insurance companies that provide life assurance to operate the EU while being supervised in their home state. If operating in another state they must gain authorisation. To gain authorisation an insurance company must limit its operations to insurance only, submit a scheme of operations, be run by people of high standing and have a minimum guarantee fund.
Furthermore, another EU directive is investment services directive aims to enable investment firms to operate in different European states. It aims to provide direct access to well-regulated markets across the EU and established basic requirements including and firms that provide certain specified investment services in the EU must obtain authorisation in their home state, firms authorised in that way can then operate in other EU states.
Additionally, the Capital Adequacy Directive applies to the trading book of credit intuitions and to investment firms that are subject to the provisions. The three main objectives are protect investors, establish a level playing field between credit institutions and non-bank investment organisations and to enhance the standing of the EU as a financial centre.
Lastly, the New Basel Accord wants to develop more risk-sensitive standardised and internal approaches to capital adequacy, aligning capital adequacy assessment more closely the key elements of banking risk. The proposed new framework mutually reinforced minimum capital requirements, supervisory review process and effective use of market discipline.
Overall, in the UK and EU we have legislations, regulatory bodies, consumer protection and EU legislation and directives that if present, inspire investor confidence.
by
ellouise1997hotmailcom (student)
