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Financial Services and Markets Act

Launched: November 2003

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Purpose of study

To assess the impact of the Financial Services and Markets Act (FSMA) on competition in the financial services sector. Part of a two year Government review of regulation in this sector.

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Findings

The findings showed no indication that FSMA had a significant negative impact on competition and that where the legislation addressed market failures it was beneficial to competition. Report identified seven high level markets which met a number of the competition indicators, such as high levels of concentration or barriers to entry. OFT decided not to carry out any further work into these markets at the time. Some have since been examined by other bodies or are subject to the competition scrutiny provisions in FSMA.

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Recommendations

None - see action below.

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Action following market study

On publication invited views from the financial services industry and other stakeholders on our analysis. No representations received.

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Market study details and report

Download the OFT Report 'Competition Review of the FSMA'  November 2004 (pdf file 550 kb)

HM Treasury also announced the conclusion of their strands of the review HM Treasury press release 2 December 2004

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Background information

See press release 'OFT Role in review of FSMA' 4 November 2003

The Cruickshank report into competition in UK banking recommended that the FSMA should be reviewed within two years of its taking effect. March 2000

FSMA 'Review on the impact of the Financial Services and Markets Act on Competition' (pdf file 383kb). March 2004




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