The FSMA 2000 replaced a regime characterized by which of the following?

• A. A system of purely statutory regulation.
• B. A system with central bank oversight only.
• C. A system of no regulation.
• D. A system that had a mix of self-regulation and statutory organisations.

Answer: (D)

The question tests your understanding of how regulation looked before FSMA 2000. Before this act, financial services regulation in the UK was not centralized under one umbrella. It combined industry-driven self-regulation with statutory oversight by government bodies. Trade associations and self-regulatory organisations set rules and supervised members, while statutory rules and enforcement came from public authorities. FSMA 2000 created a single overarching regulator (the FSA) to bring consistency and stronger consumer protection, replacing that mixed regime with a unified framework. So the description that best fits what FSMA replaced is a system that had a mix of self-regulation and statutory organisations.