The key purpose of the FSA’s regulatory regime is to correct market failure. They take a risk-based approach to regulation and direct their resources to those market failures that pose the greatest risk to their statutory objectives.

The FSA are committed to correcting many forms of market failure, including those that affect the financial system as a whole. However, they do not aim to prevent all failures of firms or all lapses of conduct. They refer to this as a ‘non-zero failure’ regime. Non-zero failure means that, in competitive markets, unsuccessful firms may fail. Their reasoning is that if all chance of failure was removed, stakeholders would have no incentive to exercise caution.

So, the responsibility for operating within the regulatory framework rests with financial services business’. Those companies who find themselves operating outside the complexities of this regime may find themselves facing onerous penalties.

Momenta bring an expert and impartial perspective on a number of key areas and develop key strategies to allow a business to achieve it’s objectives without risk of regulatory censure.