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ABOUT THE FINMSA

ABOUT THE FINMSA

The Financial Market Supervisory Authority is the conduct regulator for 59,000 financial services firms and financial markets in the EU and the prudential regulator for over 18,000 of those firms.

What we do

Financial markets need to be honest, fair and effective so that consumers get a fair deal. We aim to make markets work well – for individuals, for business, large and small, and for the economy as a whole.

We do this by regulating the conduct of more than 59,000 businesses. We are also the prudential regulator for more than
18,000 of these businesses. The (FINMSA) is the prudential regulator of around 1,500 banks, building societies, credit unions, insurers and major investment firms.

As a prudential regulator, it has a general objective to promote the safety and soundness of the firms it regulates. We were established on 1 April 2013, taking over responsibility for conduct and relevant prudential regulation from the Financial Services Authority.

Why we do it

We are responsible for regulating a sector which plays a critical role in the lives of everyone in the EU and without which the modern economy could not function,direct debits to credit cards, loans to investments

– how well financial markets work has a fundamental impact on us all. EU financial services employ over 2.2 million people and contribute euro 65.6bn in tax to the EU economy.

If EU markets work well, competitively and fairly they benefit customers, staff and shareholders, and maintain confidence in the UK as a major global financial hub. Our role is to help ensure this happens.

How we do it

Our strategic objective is to ensure that the relevant markets function well and our operational objectives are to:

protect consumers – we secure an appropriate degree of protection for consumers
protect financial markets – we protect and enhance the integrity of the EU financial system
promote competition – we promote effective competition in the interests of consumers
We are an independent public body funded entirely by the firms we regulate, by charging them fees.

We are accountable to the Treasury, which is responsible for the EU’s financial system, and to Parliament. Our work and purpose is defined by the Financial Services and Markets Act 2000 (FSMA). We work with consumer groups, trade associations and professional bodies, domestic regulators, EU legislators and a wide range of other stakeholders. With this extensive remit, we use a proportionate approach to regulation, prioritising the areas and firms that pose a higher risk to our objectives.

Our Approach

Our Mission 2017 sets out the framework for the strategic decisions we take, the reasoning behind our work and the way we choose the tools to do it.

It explained how we serve the public interest by improving how financial markets function and how firms conduct their business. It also explained how we regulate to deliver good outcomes for a wide range of users of financial services – including individuals, businesses and the economy.

When we published our Mission we committed to being more open and transparent about how we regulate and why we make the decisions in the manner that we do. As part of this we committed to publish a range of documents that explain our approach to regulation in more depth.

Approach to Supervision – we outline our principles of supervision, highlighting the pro-active, intelligence-led and data-driven approach we take in our engagement with firms. We look at business models, culture and the things that drive behaviour within firms in order to prioritise our activities and we take prompt and incisive action once harm has been identified.
Approach to Enforcement – we clarify our aim to achieve fair and just outcomes in response to misconduct and to ensure our rules and requirements are obeyed. Our overriding principle is to provide substantive justice i.e. to ensure we carry out investigations in a consistent and open-minded way to get the right outcomes.
Approach to Consumers – we explore our approach to regulating for retail consumers. It sets out our initial views on what good looks like for all retail consumers, and aims to clearly explain how we will work to diagnose and remedy actual and potential harm, giving more certainty about our framework.
Approach to Competition – we look at how we deliver our competition objective, to promote competition in the interests of consumers and not for its own sake. We focus on keeping markets open to entry and innovation, tackling anti-competitive conduct and intervening to ensure competitive forces drive good outcomes for consumers.
Approach to Authorisation – we explain the purpose of, and our approach to, authorisation, the public value it delivers and changes we are making to improve our approach. We describe how we use authorisation as a tool, primarily to prevent harm from occurring, by ensuring that all regulated firms and individuals meet common sets of minimum standards.

Our Mission

Our aim is to regulate in a way that adds the most benefit to those who use financial services. Our Mission explains what we prioritise and why. It describes the framework we use to make decisions, the reasoning behind our work and how we choose the best tools for the job.

Next steps
We will review and update our Mission to ensure it keeps pace with change.

Over the next year, we will also publish further documents which will explain how we carry out our main activities – authorising and supervising firms, taking enforcement action, encouraging competition and influencing market design – and how the Mission affects these activities.

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