UK's main regulatory body has seen its last days. The Financial Services Authority (FSA) which has been the main body responsible for the regulation of the financial services industry in the United Kingdom for over 28 years has ceased to exist. The FSA board, appointed by the Treasury in 1985, has operated independently of the government since its inception. Its main office was based in Canary Wharf, London, with another office in Edinburgh. As of this week, the FSA is no longer a regulatory agency. It has been replaced by the Bank of England; consumer arbitration will be handled by an all-new organization called the Financial Conduct Authority (FCA).
The FSA was first introduced in June 1985 by the then Chancellor of the Exchequer, Nigel Lawson, and was called the Securities and Investments Board (SIB). With the boost in England's economic standing in the 1980's, working class people looked for an investment vehicle to place their disposable income. Independent Financial Advisors or IFA's became very popular. These small financial brokerages, often made up of only one or two financial advisers, would place their business with various investment or life assurance companies in return for a commission. As the industry grew, the need for additional regulation increased proportionately.
England's banking sector was traditionally overseen by the Bank of England and was firmly controlled. A self-regulatory organization called the Financial Intermediaries, Managers and Brokers Association (FIMBRA) was introduced in order to try to regulate the quickly changing financial sector and its various divisions such as brokerages, financial consultants, stockbrokers and independent portfolio managers. A large majority of independent financial advisors joined FIMBRA in order to present credibility.
In 1994, new rules were presented by the Personal Investment Authority (PIA) in order to increase transparency by all financial bodies. This was the first organization which had the authority to govern misconduct by brokers and intermediary fiscal entities. The FSA's most recent CEO was Hector Sants who resigned in June 2012.
The Financial Services Act 2012 which was introduced on 19 December 2012 and came into force on 1 April 2013, creates a new regulatory framework for financial services and completely replaces the FSA. The FSA has undertaken responsibility to identify the key risks in the financial services industry in the year ahead and will use its powers to ensure that consumers are protected, that firms meet FCA standards and markets operate with integrity. Investors are cautioned to investigate a financial firm before making any currency trade. Any UK broker or entity still claiming to be FSA regulated may be a scam.
Some Forex brokers that were regulated by the FSA in the past include Forex.com UK, FXCM, Alpari UK, iForex, Liquid Markets and UFXMarkets, among dozens of others.