The Financial Services Markets Act is a legislative framework governing financial services and markets within a specific jurisdiction. This act establishes the legal basis for regulating financial institutions, investment products, and market conduct to ensure stability, fairness, and consumer protection. It grants powers to regulatory bodies to authorize firms, enforce rules, and investigate misconduct across various financial sectors. The objective is to maintain confidence in the financial system and prevent illicit activities.
Context
The application and adaptation of the Financial Services Markets Act to the rapidly evolving digital asset sector is a critical area of ongoing discussion for governments and industry participants. A key debate revolves around whether existing legislation adequately covers cryptocurrencies and blockchain-based financial products or if new, tailored provisions are necessary. Future legislative updates will likely seek to clarify the regulatory perimeter for digital assets, aiming to balance innovation with investor safeguards and market integrity.
The draft FSMA Order mandates a full financial services perimeter, forcing all UK-facing platforms and issuers to secure authorization and implement prudential controls.
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