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OFT role in review of FSMA

PN 142/03    4 November 2003

An assessment of the impact on competition of the Financial Services and Markets Act 2000 has been launched by the OFT. It will form part of the Government's two year review of the Act announced today by HM Treasury.

The first stage of the work, for which the OFT will commission consultants, is to design a means of identifying the key areas where the Act is likely to have had a significant impact on competition. Further work may include in-depth study of any areas identified as being of particular concern.

Further details of the review, including a summary of the terms of reference for the first stage of the work, can be found at in the market studies area of our website.

NOTES

1. The Financial Services and Markets Act 2000 (FSMA) established the FSA as the single regulator of the financial services sector. The FSA took up its powers in December 2001, replacing a number of other regulatory organisations. The remit of the FSA will be expanded during the next two years to include insurance sales (14 January 2005) and mortgage selling and advice (31 October 2004).

2. The Cruickshank report into competition in UK banking recommended that the FSMA should be reviewed within two years of its taking effect. HM Treasury accepted this recommendation and is due to begin its review before the end of 2003. Under Sections 5 and 7 of the Enterprise Act 2002, the OFT will contribute to this review by considering the impact of the FSMA on competition in the financial services sector.

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