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Understanding the FSA and Its Successors: FCA & PRA

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Updated November 12, 2025

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What Was the Financial Services Authority (FSA)?

The Financial Services Authority (FSA) was the agency that regulated financial services in the United Kingdom between 2001 and 2013. In 2013, the regulatory authority split into the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) under the Bank of England.

The Financial Conduct Authority and the Prudential Regulation Authority were created to fulfill the FSA's previous roles. Its primary objectives and responsibilities that were transferred to these new entities.

Key Takeaways

The Financial Services Authority (FSA) regulated UK financial services from 2001 to 2013.
After the 2008 financial crisis, the FSA was dissolved in 2013, and its roles were split between the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).
The FCA oversees financial markets and protects consumers, while the PRA regulates banks and insurance firms as part of the Bank of England.
The FSA aimed to ensure market confidence, public awareness, consumer protection, and reduced financial crime.
The restructuring from FSA to FCA and PRA aimed to strengthen financial regulation and prevent future regulatory failures.

Detailed Overview of the Financial Services Authority (FSA)

The Financial Services Authority (FSA) was formally established in the United Kingdom by the Financial Services and Markets Act 2000. Established in 1985 as the Securities and Investments Board, it became the Financial Services Authority in 1997 until dissolving in 2013.

The FSA regulated banks, financial advisors, insurance companies, intermediaries, and those involved in the mortgage business. The Financial Services and Markets Act laid out four primary objectives for the FSA, including encouraging market confidence in the U.K. financial system, public awareness and understanding of the U.K. financial system, securing adequate consumer protections, and reducing the incidence and impact of financial crime. Enhancing financial stability was later added as an objective. These goals were backed by a set of principles for good regulation.

Additionally, the FSA improved its role by ensuring transparency in policy-making, and maintaining political, public, and legal accountability. To this end, FSA operations were overseen and scrutinized by the Treasury and Parliament, and the agency required that annual reports include performance assessments towards fulfilling their principles.

Why and How the Financial Services Authority (FSA) Was Dissolved

After the 2008 financial crisis, officials restructured the UK's financial regulation, passing the Financial Services Act of 2012, which led to the FSA's dissolution in April 2013. To meet financial regulation needs, two new agencies were created: the Financial Conduct Authority and the Prudential Regulation Authority.

Successor Bodies to the Financial Services Authority (FSA): FCA and PRA

The Financial Conduct Authority regulates financial markets, protects consumers, ensures market integrity, and promotes competition to serve consumer interests. The Financial Conduct Authority is an independent public body funded by fees from the 58,000 firms it regulates.

The Prudential Regulation Authority’s responsibilities include the regulation of banks, credit unions, insurance firms, and investment firms. The Prudential Regulation Authority is part of the Bank of England, which in turn is owned by the government of the U.K. and is governed by Parliament. The decision-making body for the Prudential Regulation Authority is the Prudential Regulation Committee which is comprised of several members, including:

Governor of the Bank of England
Chief Executive of the Financial Conduct Authority
Deputy Governor for Financial Stability
Deputy Governor for Markets and Banking
Deputy Governor for Prudential Regulation
A member appointed by the Governor with the Chancellor’s approval
Five additional members appointed by the Chancellor

What Is the Difference Between the FSA and the FCA?

The key difference between the organizations is that the FSA was a services authority, while the FCA is a conduct authority. This means that the primary function of the Financial Conduct Authority is to ensure that businesses are acting in the correct manner, rather than maintaining a range of financial services.

When and Why Was the FSA Dissolved?

After the financial crisis of 2007–2008, and due to the perceived regulatory failure of the banks, the UK government decided to restructure financial regulation and abolish the FSA in accordance with the Financial Services Act 2012. The majority of the FSA's functions were transferred to the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA).

What Is the Role of the FCA?

The FCA is responsible for the functioning of the U.K. financial markets. Its role includes "protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers."

The Bottom Line

The Financial Services Authority (FSA) was the regulator for the financial services industry in the UK between 2001 and 2013. The role of the FSA included regulating banks, financial advisors, insurance companies and intermediaries, and entities engaged in the mortgage business.

Due to the perceived regulatory failure of the banks after the financial crisis of 2007–2008, the UK government decided to abolish the FSA in 2013. Financial regulation was restructured, and regulatory authority was divided into the Financial Conduct Authority and the Prudential Regulation Authority to enhance regulation and address previous shortcomings.

The FCA focuses on conduct regulation, ensuring financial market integrity and consumer protection, while the PRA, part of the Bank of England, supervises the safety and soundness of financial institutions. Understanding the evolution from the FSA to the FCA and PRA is key for grasping the current regulatory landscape in the UK financial sector.

Article Sources

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Legislation.gov.uk. "Financial Services and Markets Act 2000."
Financial Conduct Authority. "Corporate Governance of the Financial Conduct Authority," Page 3.
Financial Services Authority. "History."
Financial Conduct Authority. "Transparency as a Regulatory Tool."
Financial Services Authority. "Parliament."
Legislation.gov.uk. "Financial Services Act 2012."
Legislation.gov.uk. "Financial Services Act 2012: Financial Conduct Authority and Prudential Regulation Authority."
Financial Conduct Authority. "About the FCA."
Bank of England. "What Is the Prudential Regulation Authority (PRA)?"
Bank of England. "Prudential Regulation Committee."
AllAboutFinanceCareers.com. "Differences Between the FSA and FCA."
Gov.uk. "Financial Conduct Authority."

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