The Financial Services and Markets Act 2000 (FSMA 2000) was introduced as a general framework for financial services legislation and regulation in the UK. As part of government proposals to overhaul the UK financial services regulatory structure, the Financial Services Authority was disbanded on 1 April 2013 and its functions were split between the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), FSMA 2000 was retained as the primary legislation for the UK financial services industry.
FSMA 2000 regulates activities relating to investments, including shares and rights to acquire shares, and is therefore relevant where share incentives are offered by a company to its employees. Under FSMA 2000, a person is prohibited from carrying on a regulated activity in the UK, or purporting to do so, unless authorised or exempt. Failing to comply with this general prohibition is a criminal offence, and may also result in agreements which are entered into in contravention of FSMA 2000 being unenforceable against other parties without a court order or the permission of the FCA. For a a general overview of FSMA 2000, see Practice Note:
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