API Marketplace

Solutions

Resources

Our Company

Book a Demo

← Back to Glossary

FSMA Financial Services Act

United Kingdom2000Consumer Protection

Overview

The Financial Services and Markets Act 2000 (FSMA) is the cornerstone of financial regulation in the United Kingdom. It establishes the legal framework for authorizing, supervising, and enforcing standards for banks, insurers, investment firms, fintechs, and other financial service providers. FSMA empowers the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) with regulatory oversight.
FSMA has evolved through various amendments, including major updates under the Financial Services Act 2021 and post-Brexit regulatory reforms. It governs conduct of business, prudential requirements, market integrity, and consumer protection.

Key Obligations

Obtain appropriate authorization from the FCA or PRA before carrying out regulated activities
Comply with conduct of business rules to treat customers fairly
Maintain adequate financial resources and risk controls

Ensure transparency in marketing, promotions, and disclosures
Report breaches, suspicious activity, and relevant financial information to regulators
Uphold standards of integrity, competence, and accountability

Stay ahead of risk with Signzy

Explore tools that help you onboard, monitor, and verify with confidence

One Touch KYC
Launch global KYC flows with built-in document OCR, liveness checks, deepfake detection, and AML, all through a single, customizable dashboard.
Transaction Monitoring
Monitor transactions in real-time and analyse past behaviour to identify suspicious activities and ensure regulatory compliance across the user journey.
AML Screening
Screen users against Politically Exposed Persons (PEP), watchlists, sanctions lists, adverse media, and more through one-time screening and advanced monitoring.

Related Regulations

FCA Consumer Duty Regulation

SM&CR Accountability Regime

UK Payment Services Regulations

FAQ

Who does FSMA apply to?

FSMA applies to financial institutions, insurance providers, investment firms, fintech companies, and any entity conducting regulated financial activities in the UK.

What is the role of the FCA and PRA under FSMA?

The FCA oversees conduct and consumer protection, while the PRA focuses on prudential regulation for systemically important firms.

Do firms need authorization under FSMA?

Yes. Firms must be authorized by the FCA or PRA to legally carry out regulated activities under the Act.

How does FSMA interact with newer regulations like the Consumer Duty?

FSMA provides the foundational authority, while regulations like the Consumer Duty are implemented under its framework to further strengthen customer outcomes.