The Financial Conduct Authority was created in 2013 to replace the Financial Services Authority.
Its role is to regulate the UK’s financial services industry, protecting customers, maintaining stability in the sector and promoting competition.
Below we will look in more detail at the FCA’s principal and secondary roles.
Principal role of the FCA
As the regulator of UK financial services companies the FCA sets standards for those firms and holds them to account if they do meet the requisite standards. This helps the UK to maintain its position as one the world’s leading financial hubs where consumers can feel protected and firms operate with transparency and certainty.
The FCA regulates the conduct of some 42,000 businesses and prudentially supervises around the same number. There are a number of FCA compliance consultants offering specialist advice, support and training to FCA regulated firms and you will find them online at sites such as adempi.co.uk/.
Secondary objective of the FCA
Since 2023, the FCA has had a secondary objective aimed at encouraging growth in the UK economy, alongside alignment with international standards, and international competitiveness.
Why is the FCA needed?
Although it may not be immediately apparent, everyone relies on financial services of some kind, whether it is using a bank account, investing in a pension or taking out a loan or insurance. Businesses also rely on similar services for investment and borrowing for growth.
The sector is huge and it is important that it is regulated in a responsible manner. The FCA has a strategic objective to ensure the relevant markets operate well, and this means protecting consumers and the integrity of the financial system in the UK, as well as promoting competition to benefit consumers.
Remember that the FCA is an established independent public body and is funded entirely from the fees which are charged to regulated firms. The authority’s objectives and role in the industry are defined in the Financial Services and Markets Act 2000, and it is responsible to the Treasury and Parliament.
We trust this brief overview of the FCA has been helpful.