What is the Financial Conduct Authority (FCA)? Every financial institution in the United Kingdom make reference to this body on their publications and websites but what exactly is it?
‘The Financial Conduct Authority is the conduct regulator for nearly 60,000 financial services firms and financial markets in the UK and the prudential supervisor for 49,000 firms, setting specific standards for 19,000 firms.’
The point of the authority is to help consumers get a fair deal, help ensure the UK Financial system is seen to be fair and to encourage competition within the finance firms. The reason why this is important is that if unfairness or monopolies are allowed to occur then the whole financial system will suffer and decline.
The FCA was established in 2013. The Financial Services act 2012 created the FCA and the Prudential Regulation Authority. These two agencies replaced the Financial services authority (FSA) while oversaw the 2008 recession and subsequent banking bailouts.
The authority is funded by the firms that they regulate. The authority charges them fees. The authority is responsible to the Treasury and to Parliament.,
Yes, the FCA has serious powers. It can bring criminal and civil charges against anyone operating in the financial world. All these charges have to be proven in court. Of course, the issue with the FCA is the same with the police. It has limited funding and skilled personnel so it is difficult to catch out all rogue traders.
It is essential for a firm operating in finance to be regulated by the FCA so that is seen to be trustworthy. It is also mandatory for most companies operating in finance.
Property development and property investment simply does not proceed without finance. Those companies like banks and private investors providing the finance need to do so in an honest and fair way.
When you see that a business is regulated by the FCA you can trust it a little bit more. But go on to the FCA website and check that the company is regulated and not just claiming to be. Also remember that companies get kicked out of the FCA on a daily basis. Just because a company is regulated by the FCA does not mean they are saints. You can do business with them, they behave badly and then they get thrown out of the FCA – this won’t help your finances. So don’t trust anyone fully despite any credentials.
If you are providing financial services you are regulated by the FCA. If you are a bank or an insurance company you are regulated by the Prudential Regulation Authority.