Financial Services and Markets Act

What the OFT’s FSMA team does

Under section 160 of the Financial Services and Markets Act 2000, the OFT is responsible for keeping under review the regulating provisions and practices of the Financial Services Authority (FSA) for significantly adverse effects on competition.

If the OFT considers that FSA regulating provisions or practices (or a combination of FSA regulating provisions and practices) have a significantly adverse effect on competition it must report to HM Treasury, the Competition Commission and the FSA.

Under section 303 of the Financial Services and Markets Act 2000 the OFT is required to report on whether the regulatory provisions (or a combination of the regulatory provisions) of organisations, which apply to the FSA for 'recognition' status, have a significantly adverse effect on competition. Organisations apply to become a 'recognised investment exchange' or 'recognised clearing house' under section 287 or section 288 of the Financial Services and Markets Act 2000. The OFT report is sent to HM Treasury, the Competition Commission and the FSA.

The OFT also has powers in relation to recognised bodies under section 304 of the Financial Services and Markets Act 2000.

Latest issues

• The OFT has published a non-confidential version of its section 303 report into the ICE Clear Europe Limited application for Recognition as a Clearing House.
  Download report on ICE Clear Europe Limited: application to become a recognised clearing house (pdf 401 kb).
• Following a review by the OFT, ICE Clear Europe Limited has been granted recognition as a Recognised Clearing House by the FSA.  Within its review, the OFT recognises that some competition concerns have been expressed about clearing and settlement in the derivatives market. The OFT would welcome views from interested parties that would inform the OFT's prioritisation decision as to whether to undertake any work looking at clearing and settlement in the derivatives market. For details on submitting views, see press release.

Past recognition applications under section 303 of FSMA 2000

Recognised investment exchanges
Virt-x Exchange Limited (2001)
EDX London Limited (2003)
NYMEX Europe Limited (2005)
PLUSMarkets plc (2007)

Recognised overseas investment exchanges
NASDAQ Stock Market Inc. (2001)
Sydney Futures Exchange Limited (SFE) (2002)
US Futures Exchange, LLC (Eurex US)  (2003)
Board of Trade of the City of New York Inc. (NYBOT) (2007)

Recognised clearing houses
European Central Counterparty Limited (2007)

Recognised overseas clearing houses
SIS X-Clear AG (2004)
Chicago Mercantile Exchange Inc. (2007)
Eurex Clearing AG (2007)
ICE Clear US Inc. (2008)  

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