Financial Sector Regulations

Running head: FINANCIAL SECTOR REGULATIONS
Financial Sector Regulations
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1FINANCIAL SECTOR REGULATIONS
Table of Contents
1.0 Introduction................................................................................................................................3
2.0 The objective of Regulatory......................................................................................................3
2.1 Overview of the banking regulator and critical regulation........................................................4
2.3 Finance Conduct Authority........................................................................................................7
2.5 The instruction prevailing banks’ interactions with their customers.........................................9
2.6 Requirements of Anti-money legalizing..................................................................................10
2.7 Conclusion...............................................................................................................................11
References......................................................................................................................................12

2FINANCIAL SECTOR REGULATIONS
1.0 Introduction.
The sector of Finance and banking in a given state play a significant role in the economic
development of that state. For instance, in the development of economy in United Kingdom
(‘UK’). London, is the best city having a significant business place in the continent of Europe
and worldwide. As an outcome, there was structural renovation in the financial regulatory system
of the UK. The transformation program included dismantling the major financial regulator of
United Kingdom, where “twin peaks” system replaced the Financial Service Authority (FSA)
comparing a prudential regulation and a financial conduct Authority (FCA).
2.0 The objective of Regulatory
Alexander and Lastra (2018) stated that financial sector policies are broadly classified into
several categories like prudential policies for ensuring safety as well as soundness of the
financial system. Regulatory and supervisory policies along with depositor and consumer
protection policies have an important role for financial sector (Baumeister et al. 2018). In
addition, financial inclusion policies to ensure an enough supply of credit to the significant
sectors like SMEs and infrastructure are required to fulfil in the sector. Prudential policies
comprise micro-prudential as well as macro- prudential policies. The objective of the policies
identification as well as prevention of vulnerabilities in the financial system. In addition, micro-
prudential policies are concentrated on ensuring safety as well as soundness of the individual
financial institutions. However, stability in financial sector is considered as essential condition
in order to achieve other objectives of the sector and development of macroeconomic stability.
However, it is not an adequate condition in order to attain the objectives.

3FINANCIAL SECTOR REGULATIONS
2.1 Overview of the banking regulator and critical regulation.
The bank regulations in the UK has responsibility which is divided between Prudential
Regulation authority, (PRA) and the Finance Conduct Authority, which is abbreviated as (FCA).
Also, there is a third body called the Finance Policy Committee that sits in the bank of England.
(Davies, et al., 2007 ).The primary objective of this body is to monitor, identify take action to
reduce or remove systemic risks, with the aim of taking care and improving the ability of finance
system to adapt itself to the consequences a a catastrophic failure in the UK.
The Finance conduct Authority, (FCA) and PRA both derive their potential from the primacy of
rule that governs the finance service in the UK; as amended the finance Service and Markets Act,
(FSMA) 2000. The Finance Service and markets Act marks it an illegal offense towards
participating in the activities that is regulated by business way in the United Kingdom unless
authorized (Beck and Levine 2018). The subordinate rule that was created under finance Service
and markets Act creates the list of events that are regulated in the United Kingdom. The
established list is amended also updated every there and now to give room for new events, for
example; the benchmarks administration, which is the activity that was regulated in 2015. The
generated list was to consider the application of the EU markets in financial instrument
Directives, (MiFID) back in 3rd January 2018. Specifically, the latest activity or an organized
trading facility was included.
For banks, the activities that are regulated can be defined by accepting deposits.
Accepting deposits can be considered an event that is controlled only when credits are loaned to
individuals, “third parties” or also applicable to a company commotion is financed out interest
on, or out of the service of (Hassani et al. 2018). This takes control of banks and helps to build
humanities in the United Kingdom, here it must be given power from Prudential Regulation