UK market

PW Editor author
Published 2021-12-01

While the UK's two biggest exports are entertainment and finance, 2005 was a great year. His best-selling album was "X & Y" by Coldplay, a British rock band. "Harry Potter and the Half-Blood Prince" sold more copies in its first 24 hours than any previous novel. "Peppa Pig," a children's television show that would become so popular that American parents would complain about giving their children a British accent, has made its transatlantic debut.

London Stock Exchange (LSE) Definition

UK Stock Market regulations

This section has been prepared as a summary of the FSA regulations for securitized derivatives. Additionally, you can view details of London Stock Exchange regulatory requirements through downloads. The table below should be used only as a general guide highlighting some of the key points related to the warranties covered.

If you are unsure of how the regulations apply to you, contact your regular FSA supervisory contact.

If you do not have permission to advise or trade in derivatives, you will need to apply to the FSA for a waiver of your permits before entering the covered warrants market.

Risk warning, relevant for all brokers

A risk warning should be given to clients, prior to any transaction or advice, providing an explanation of all key risks. Note: A warranty risk warning from the company is not sufficient.

A one-way risk warning may be acceptable, but only if the business can demonstrate that the customer received the risk warning prior to an initial purchase and had a proper opportunity to review its terms. Electronic signatures may be appropriate.

The risk warning between broker and client may cover the initial execution and all subsequent transactions in instruments with a similar risk profile. This also affects automation and advisory tools like

Customer suitability

A broker can negotiate the services and availability of securitized derivatives to any client.

Suitability checks are not required, unless the marketing takes the form of a direct financial promotion offer (i.e. which allows the client to enter into an investment contract).

A broker can market the services and availability of securitized derivatives to any client.

Adequacy checks are mandatory.


If a company is not authorized to trade in derivatives, it will need to apply for a waiver of its existing license.

If a company does not have the authorization to give advice on derivatives, it will have to seek a waiver of its existing authorization.

Training and competence

There are no specific training and skill requirements for executing a transaction, but businesses should be aware of their general duty to ensure that those engaged in a particular business are competent to do it.

The FSA will carry out counseling training and proficiency checks. Among other things, this will require brokers to have staff who have passed the relevant derivatives exams or the securities and derivatives exam.


London's financial district also seemed to be on top of the world. Gone is the postwar backwater that wasted its life financing the remnants of the imperial commodity trade. Half a century of financial innovation, trade liberalization, and deregulation had drawn foreign banks to the Square Mile and then opened it up to international capital. As the birthplace of the Eurobond market, which allowed companies to borrow US dollars outside the United States, London had long been an international hub for debt and currency trading. Now it was also becoming the place to raise equity capital. One fifth of all companies in the world that went public through an initial public offering (IPO) in 2005 have chosen to do so on the London Stock Exchange (lse). In a few years, analysts who feared the United States was suffering from a shortage of records would cite Britain as an example of how to get it right.