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In response to this situation, it was considered that
new systems were needed to regulate investment business. In 1981, the
then Secretary of State for Trade appointed Professor Gower to undertake
a review of investor protection and advise on the need for new
legislation . Professor Gower's final report published in 1984,
constituted the basis for the Government's subsequent proposals which
culminated in the Financial Services Act (1986). |
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The Act provides the overall framework of legislation
for investor protection. The system that has been adopted is one of
self-regulation supervision by a government regulator. The crux of the
Act is contained in Section 3, which requires that any person carrying
on investment business in the UK be authorised, unless he or she is
exempt from this requirement. Contravention of Section 3 is a criminal
offence. |