Insures legal liability for (pure) financial loss by extending public and/or product liability cover as opposed to financial loss flowing from physical injury or damage to person or property. The extension is claims-made, subject to an excess or co-insurance and has a separate annual aggregate limit of indemnity. Liquidated damages are excluded. The financial loss extension under product liability cover includes the efficacy risk. The main insuring clause of the public liability policy covers financial loss following accidental obstruction, accidental nuisance, etc.

an independent organisation set up under the Financial Services and Markets Act 2000, covering firms and activities regulated by the Financial Services Authority, which replaced a number of former complaints handling schemes.

A ‘free to consumers’ dispute resolution service with three divisions: banking and loans, insurance and investment. Firms are bound when the Ombudsman makes decisions in favour of the consumer up to £100,000 plus interest, above which the Ombudsman may recommend full payment. Decisions are not binding on the consumer. FOS can also direct firms to take any steps deemed just. The FOS is funded by a general levy on all firms covered by its service. Membership is compulsory for all authorised firms. The Pensions Ombudsman operates separately.

CII qualification accepted by the FSA as proof that a candidate has the level of knowledge required to become a financial adviser. Holders are eligible to join the Society of Financial Advisers.

Regime introduced under FSMA, s.21. A financial promotion is the communication, in the course of business, of an invitation or inducement to engage in an investment activity. It is unlawful if it is not made by an authorised person or has not been approved by such a person. ‘Communication’ embraces all forms of communication in place of previous separate rules for insurance advertisement, unsolicited calls, etc.

the Act which created a unified regulatory framework in the UK for financial services, including insurance, under which functions and powers are conferred on the Financial Services Authority.

Statutory tribunal, within the Court Service, operating as a court of first instance. Persons disciplined by the FSA have the right to go to the Tribunal. The burden of proof attaches to the FSA. Usually there is an oral hearing on the substantive issues. The Tribunal’s decision on fact is final but points of law may be appealed. The Tribunal can award costs against the applicant or the FSA. The Tribunal consists of a legally qualified chairman and two industry members.

an independent body that regulates the financial services industry in the UK; it was set up by the Financial Services and Markets Act 2000 and is accountable to Treasury Ministers; it is financed by the financial services industry; its statutory objectives are to maintain confidence in the financial system, promote public understanding of the financial system, secure appropriate degrees of consumer protection for consumers, and reduce financial crime.

The UK’s statutory financial regulator. Almost all kinds of financial services firms must secure FSA authorisation. It regulates and monitors banks, building societies, friendly societies, Lloyd’s, credit unions, insurance and investment firms (stockbrokers and fund managers) and independent financial advisers. The FSA does not cover loans, credit and debt, and does not regulate occupational pension schemes. The FSA has powers to investigate, discipline and prosecute, and can impose unlimited fines on anyone guilty of market abuse. The FSA’s four objectives are: maintaining market confidence; promoting public understanding of the financial system; protecting consumers; fighting financial crime. See FSA HANDBOOK. (Visit www.fsa.gov.uk).

a statutory fund of last resort for customers of regulated firms, set up under the Financial Services and Markets Act 2000.