CFM14020 | Understanding corporate finance: the legal and regulatory framework: the key legislation

The Companies Act 2006

All UK companies operate within the legal framework of the Companies Act 2006. Unless a company’s Articles of Association specifically restrict the objects of the company , its objects are unrestricted and it has the power to undertake a wide range of financial transactions.

The Financial Services and Markets Act 2000 as amended by the Financial Services Act 2012

In addition, companies operating in the financial sector are regulated in accordance with the provisions of the Financial Services and Markets Act 2000 (FSMA2000) and various EU directives. Banks, building societies and the largest investment firms are regulated by the Prudential Regulatory Authority (PRA). Smaller firms are regulated by the Financial Conduct Authority (FCA) which is also responsible for conduct regulation of banks and building societies.

Further information on their regulatory and conduct responsibilities is available on their websites:

PRA - https://www.bankofengland.co.uk/prudential-regulation

FCA - https://www.fca.org.uk

The Building Societies Act 1986

Building societies are regulated by the PRA, subject to legislation set out in the Building Societies Act 1986. That Act has subsequently been amended a number of times most notably by the Building Societies Act 1997, FSMA2000 and the Financial Services Act 2012. Further information is available on the website of the Building Societies Association: https://www.bsa.org.uk