A model of protecting financial service clients in the UK

  • Patrycja ZAWADZKA University of Wrocław , Poland
Keywords: consumer protection, financial services, the UK, Prudential Regulatory Authority (PRA), Financial Conduct Authority (FCA)

Abstract

Aim: The purpose of the paper is to describe changes occurring in the UK in consequence of the financial crisis with regard to protecting financial service customers, which prompts towards the answer to the question about the optimum protection model when it comes to protecting financial market customers. The author analyses whether regulations in use in the UK are sufficient to ensure cohesion between the public supervision of the financial market and customer protection. In practice, these value may be in opposition.

 Design / Research methods: The basic research method used in the paper is analysing sources of law and the literature of the subject.

 Conclusions: The most recent financial market crises undermined the assumption that public and legal supervision is a sufficient tool preventing market turbulences. The financial market supervision should expand beyond professional financial service providers. At the same time, it is also necessary to ensure customer protection. Having conducted the research, the Author recognises that the model used to supervise the financial market and protect financial service customers adopted in the UK deserves to be multiplied on the basis of Polish law, with a particular focus on transferring the supervisory function to the central bank.

 Originality / value of the article: The topic is pertinent and important as, in the EU member states, adaptation of new legal solutions in the area of financial supervision is considered. However, the problem tackled in the paper has not received any wider coverage in the literature of the subject. The UK regulations may and, according to the author - should serve as a model for the Polish legislator who is planning to challenge the issue of organising supervision over the Polish financial market in the near future.

References

About the FCA, https://www.fca.org.uk/about/the-fca [8.09.2017].

Annual Report and Accounts 2015/16 (for the year ended March 31, 2016), Financial Conduct Authority, London 2016, https://www.fca.org.uk/publication/corporate/annual-report-2015-16.pdf [12.09.2017].

Dhama S., Taylor J., Proctor C. (2010), The reform of financial regulation in the United Kingdom after the crisis, in: International Monetary and Financial Law. The Global Crisis, eds. Giovanoli M., Devos D., Oxford University Press, Oxford/ New York.

Ellinger E.P., Lomnicka E., Hare C.V.M. (2011), Ellinger’s modern banking law, 5th edition, Oxford University Press, Oxford/ New York.

Fawcett A.C. (2001), Examining the objectives of financial regulation – will the new regime succeed? A practitioner’s view, in: Regulating Financial Services and Markets in the 21st Century, eds. Ferran E., Goodhart C.A.E., Hart Publishing Co., Oxford 2001.

Fedorowicz M. (2013), Nadzór nad rynkiem finansowym Unii Europejskiej, Difin, Warszawa.

Ferran E. (2011), The break-up of the financial services authority, “Oxford Journal of Legal Studies”, vol. 31 no. 3, pp. 455-480.

Ferran E., The new mandate for the supervision of financial services conduct, “Current Legal Problems”, Vol. 65, pp. 411-453.

Jurkowska-Zeidler A. (2008), Bezpieczeństwo rynku finansowego w świetle prawa Unii Europejskiej, Wolters Kluwer, Warszawa.

Law J. (ed.) (2016), A dictionary of business and management, 6th edition, Oxford University Press Oxford/ New York.

Memorandum of Understanding between HM Treasury, the Bank of England and the Financial Services Authority, http://www.bankofengland.co.uk/about/Documents/legislation/mou.pdf [8.09.2017].

Olszak M. (2011), Bankowe normy ostrożnościowe, Wydawnictwo Temida 2, Białystok.

Patrikis E.T. (2010), Striking changes in US banking supervision and regulation, in: International monetary and financial law. The global crisis, eds. Giovanoli M., Devos D., Oxford University Press, Oxford/ New York.

Penn B., Ko C. (2014), United Kingdom, in: Banking regulation. Jurisdictional comparisons, 2nd edition, ed. Bösch R., Thomson Reuters (Professional), London.

Pilbeam K. (2010), Finance & Financial Markets, 3rd edition, Palgrave Macmillan Education, London 2010.

Stiglitz J.E. (1994), The Role of the State in Financial Markets, Word Bank, Washington D.C.

Prudential Regulation Authority, http://www.bankofengland.co.uk/pra/Pages/default.aspx [08.09.2017].

Legal acts

Bank of England Law of 1998 (1998 c. 11).

Financial Services Act of 1986 (1986 c. 60).

Financial Services and Markets Act of 2000 (2000 c. 8),

http://www.legislation.gov.uk/ukpga/2000/8/pdfs/ukpga_20000008_en.pdf [8.09.2017].

Financial Services Act of 2012 (2012 c. 21)

http://www.legislation.gov.uk/ukpga/2012/21/section/6/enacted [8.09.2017].

Financial Services (Banking Reform) Act 2013 (2013 c. 33).

Documents

A new approach to financial regulation: building a stronger system, the Financial Secretary to the Treasury, February 2011, available on: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/81411/consult_newfinancial_regulation170211.pdf [12.09.2017].

A new approach to financial regulation: summary of consultation responses, HM Treasury, November 2010.

Published
2018-01-07
Section
Articles