Financial Conduct Authority (UK) (FCA)

What Is the Financial Conduct Authority (UK)?

As the regulator of the financial services industry in the United Kingdom, the Financial Conduct Authority (FCA) is responsible for the functioning of the U.K.'s financial markets. The goal of the organization is to ensure honest and fair markets for individuals, businesses, and the economy as a whole. The Authority does this by protecting consumers, protecting the financial markets, and promoting competition. The FCA falls under the purview of the U.K.'s Treasury and Parliament.

Understanding the Financial Conduct Authority (UK) (FCA)

The Financial Conduct Authority (FCA) has three operational objectives in support of its strategic goal — to protect consumers, to protect and enhance the integrity of the U.K. financial system, and to promote healthy competition between financial services providers in the interests of consumers. The FCA was established on April 1, 2013, and assumed the responsibility for conduct and relevant prudential regulation from the Financial Services Authority. The FCA’s statutory objectives were set up under the Financial Services and Markets Act 2000 and amended by the Financial Services Act 2012. The Act of 2012 made major changes to the way financial services firms are regulated in the United Kingdom, and was introduced to ensure that the financial sector manages and contains risks more effectively following the financial crisis of 2008 to 2009.

Financial Conduct Authority Powers

The FCA has sweeping powers to enforce its mandate, including rule-making and investigative and enforcement powers. The FCA also has the power to raise fees, which is necessary since it is an independent body and does not receive any government funding. The FCA, therefore, charges fees to authorized firms that carry out activities regulated by the FCA and other bodies such as recognized investment exchanges.

The Functions of the Financial Conduct Authority (UK) (FCA)

According to the FCA's website, the authority regulates the conduct of 59,000 financial services firms and financial markets in the United Kingdom. The goal is to ensure honest and fair markets for individuals, businesses of all sizes, and the economy as a whole. The Authority does this by protecting consumers, protecting the financial markets, and promoting competition. The FCA is controlled by the U.K.'s Treasury and Parliament.

Financing the Financial Conduct Authority (UK) (FCA)

The FCA is an independent public body that charges to fees to the firms it regulates. Periodic fees charged to firms provide most of the funding required by the FCA to carry out its statutory duties. These fees are based on factors such as the type of regulated activities undertaken by a firm, the scale of those activities, and the regulatory costs incurred by the FCA.