Delivering appropriately tailored protection for consumers

These provisions are designed to deliver an appropriate level of protection for consumers and maintain market confidence by promoting good standards of market conduct. Many of the protections that will be afforded to retail clients will not apply to dealings with professional customers but in some cases, as with client money and custody, for example, the rules and guidance will apply to a firms dealings with all its clients. Michael Foot, Managing Director and Head of Financial Supervision, said:

The final version of our rules and guidance in this area is designed to meet the objective we set at the start of public consultation - to produce an appropriately tailored and simplified set of requirements.

The Conduct of Business Sourcebook is considerably shorter than the rule books it replaces and attempts to strikes the right balance between continuity and change as we move forward to the new regulatory regime. And the standards for Inter-Professional Conduct build on the clear consensus to maintain a tailored approach for dealings between professionals that will continue to make the UK an attractive place to undertake wholesale financial services.

The primary purpose of the Conduct of Business Sourcebook, which will operate across the board for investment firms, is to set business standards for various aspects of firms relationships with their customers. It has a key role in delivering and supporting the FSAs consumer protection objectives by setting standards for firms dealing with customers in three main areas: fair dealing by firms when they advise customers or manage investments for them; information, so that customers can make informed choices; and protection, of customers money and assets.

The primary purpose of the Inter-Professional Conduct (IPC) chapter of the Market Conduct Sourcebook is to set appropriate standards for firms dealings between other professional counterparties, where the main regulatory concern is market conduct and integrity rather than consumer protection. The detailed rules of the draft Conduct of Business Sourcebook are, for the most part, switched off for dealings with market counterparties and replaced by guidance and statements of recommended good practice.

Notes for editors

1. The Conduct of Business Sourcebook (Policy Statement 45) is available on the FSA Website www.fsa.gov.uk. It sets out the FSAs policy conclusions and response to points made to Consultation Paper 45 The Conduct of Business Sourcebook issued in February 2000 and Consultation paper 57 The Conduct of Business Sourcebook Supplement issued in June 2000. It also consults on the drafting of remaining rules.

2. The Conduct of Business Sourcebook includes the FSA's rules for stakeholder pension schemes. Policy Statement 61 is available on the FSA Website and sets out the FSA's policy conclusions and commentary on responses made to Consultation Paper 61 issued in August 2000 concerning the regulation of stakeholder pension schemes.

3. The Inter-Professional Conduct chapter of the Market Conduct Sourcebook is also available from the FSA Website (Consultation Paper 83). It sets out the FSAs policy conclusions and response to points made to Consultation Paper 47 The Inter-Professionals Code issued in May 2000.

4. The final set of standards will apply after the implementation of the Financial Services and Markets Act to firms authorised by the FSA to carry on investment business.

5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the protection of consumers; and fighting financial crime.

6. The FSA aims to maintain efficient, orderly and clean financial markets and help retail consumers achieve a fair deal.