In December 2001 the FSA assumed responsibility for almost all of the financial services industry through The Financial Services and Markets Act 2000 (FSMA 2000). The FSMA 2000 was implemented to enable the transfer of regulatory power to be effected as smoothly as possible to the FSA. The FSMA was implemented by Parliament and consolidated all previous Acts under one framework. The FSMA gave effect to a new regulatory regime.

A Fixed rate deposit gives a fixed rate of return for the duration of the deposit. As rates are fixed, the customer is at risk of general interest rates rising on other accounts which will mean they will not benefit. Fixed rate accounts will have a penalty that will mean loss of interest if the account is closed during the term.

Life cover is essential if there are dependents. Life cover is designed to protect those left behind in the event of premature death. A young family is particularly vulnerable as they are very often reliant on one income or may have very expensive child care costs if the primary carer were to die.

Following The Retail Distribution Review (RDR) financial advisers are required to obtain and hold an annual Statement of Professional Standing as evidence that they are meeting the standards, which will be issued by an accredited body. The FCA will monitor the bodies with a list in the FCA handbook. The accredited bodies have an obligation to ensure that advisers maintain the required standards.  An accredited body is The London Institute of Banking and Finance (LIBF).

Capacity for loss can be defined as the amount a client can afford to lose without it affecting their standard of living. Whereas their attitude to risk can be defined as how much risk the client is willing to take.

The FOS will deal with complaints in respect to regulated products and advice. The complaint must have been made within 6 years of the event occurring or within 3 years of becoming aware of the reason to complain and not be subject to a court case. If the provider and the FOS has not dealt with the complaint made by the complainant to their satisfaction, they can take their complaint to the courts.

As she is a BRT payer her tax rate is 20%. The income from the unit trust is taxed as interest after the £1,000 personal savings allowance. This leaves £1,000 taxed at 20% = £200.

All retired people are expected to have a total income of a specified amount. Pension credit is paid to individuals who reach State Pension Age (SPA) and receive less than the Appropriate Amount. Pension credit comes in two parts: Guaranteed credit and Savings credit.

Guaranteed credit: Brings all income (not just state pension) from all sources to an appropriate level. The appropriate amount for singles is £182.60 and £278.70 if a couple.

Guarantedd credit is Means tested to £10,000. The first £10,000 of savings is ignored, savings above is deemed to generate £1 of income for every £500 (or part of) over £10,000. This reduces the pension credit by £1 for every £500 over £10,000.

Market manipulation is when a person creates a false rumour for their own financial gain. Insider dealing is when a person knows the truth and uses that information for their own financial gain. Both are considered criminal offences and will invoke an FCA investigation.

A primary market allows the issuer (the borrower) to issue (sell) a security for the purpose of borrowing. A primary market is where the security cannot be sold on. Short term within financial markets is considered borrowing for less than 1 year. A REPO is a sales and repurchase agreement that allows a borrower to borrow cash cheaply as they offer collateral in return. It is a form of secured lending and makes it less risky for the lender. A REPO is the financial equivalent to pawnbroking.