Financial Services: Regulation
Treasury
Written answers and statements, 5 November 2009
Paul Keetch (Hereford, Liberal Democrat)
To ask the Chancellor of the Exchequer which legislative provision authorises the Financial Services Authority to require qualified independent financial advisors to submit themselves for qualification under fresh criteria.
Sarah McCarthy-Fry (Parliamentary Secretary, HM Treasury; Portsmouth North, Labour)
Under section 41(2) of the Financial Services and Markets Act 2000 (FSMA), the Financial Services Authority (FSA) is required, when giving or varying permission, or imposing or varying any requirement, to ensure that the person concerned will satisfy, and continue to satisfy, the threshold conditions in relation to all of the regulated activities for which he has or will have permission.
The threshold conditions, defined in section 41(1), include the requirement that the person concerned is "fit and proper" in all the circumstances (schedule 6, paragraph 5). The FSA may raise the standards by which this criteria is tested and apply the new criteria to advisers who are already authorised under FSMA. Indeed, section 41(3) expressly states that the FSA, as the authority and having due regard to its duty under section 41(2), may take:
"such steps as it considers are necessary, in relation to a particular authorised person, in order to secure its regulatory objective of the protection of consumers."