The Financial Conduct Authority or FCA is the regulatory body for the financial industry in the United Kingdom. The FCA is an independent public body, which is funded entirely by the firms that it regulates.
The organization works with consumer groups, trade associations, domestic regulators and professional organizations, as well as a wide range of other stake holders. The agency uses a proportionate approach to regulation, giving its priorities to firms that pose a higher risk to the regulator’s objectives.
The agency’s work and purpose is outlined by the Financial Services and Markets Act of 2000, and it is accountable to the UK Parliament, as well as to the Treasury, which is the ministry that is responsible for the UK financial system.
The FCA was formed in 2013 after the Financial Services Act received royal assent on December 19th, 2012 and became effective on April 1st, 2013. The act abolished the FCA’s predecessor, the Financial Services Authority or FSA and created a new regulatory framework for financial services.
The legislation gave the Bank of England responsibility for the country’s financial stability, and fused micro and macro prudential regulation with the creation of the Prudential Regulation Authority or PRA. The PRA is another financial services regulatory body that succeeded the FSA. That agency is structured as a company that is completely owned by the Bank of England.
The FCA is a “private company limited by guarantee”, which in British and Irish law means that the company is financed by members who act as guarantors instead of by share capital and stockholders. This form of corporation is primarily used by non-profits and NGOs.
Location and Jurisdiction
The FCA’s central offices are in London, England. The FCA can be contacted through toll-free numbers in the UK, with a special line for international calls. In addition, queries can be made via email or through the organization’s Consumer web chat. The FCA’s official website is situated at https://www.fca.org.uk .
The FCA’s jurisdiction is within the United Kingdom, where the organization regulates the conduct of 56,000 businesses in the UK financial sector. Of these, 18,000 businesses are regulated by the Prudential Regulation Authority, which is the prudential regulator of banks, credit unions, building societies and designated investment firms.
The FCA’s principal goal is to maintain fair and honest markets so that consumers get a fair deal, which is the agency’s strategic objective. The organization’s operational objective consists of securing an appropriate level of protection for consumers; protecting and enhancing the integrity of the UK financial system; and promoting effective competition in the interest of the UK consumer.
The organization is also responsible for the prudential regulation of firms not regulated by the PRA; regulating standards of conduct in the retail and certain wholesale markets; and supervising the infrastructures which support those markets.
The FCA also has the power to conduct investigations on organizations and individuals, and it can ban financial products for up to one year while it considers an indefinite ban. As of April 1st, 2014, the agency is responsible for the consumer credit industry, having taken over the role from the Office of Fair Trading.
FCA in the News
This link describes how the FCA will enforce a new global foreign exchange code, linking it to the UK’s manager accountability rules for bankers operating in London:
Below is a list of brokers that are FCA regulated