What is the Financial Conduct Authority?

The Financial Conduct Authority (FCA) is an independent public body that regulates the financial services and markets in the UK. It aims to protect consumers, maintain the integrity of the industry, and promote competition.

Ruth Jackson-Kirby Published on 16 February 2021.
What is the Financial Conduct Authority?

The Financial Conduct Authority (FCA) was created in 2013 by the government to regulate financial services, firms and markets so that consumers are treated fairly. Here’s everything you need to know about the FCA.

What is the Financial Conduct Authority?

The Financial Conduct Authority, or FCA, has the aim of making sure the UK’s financial markets work well. That means making sure the companies involved in the markets are honest and that consumers get a fair deal.

It is an independent body funded by the 60,000 firms that are regulated by the FCA.

It has the power to enforce the rules laid down to govern the financial services industry. In practice, this means the FCA investigates and acts when a business or individual is suspected of breaking the rules.

The FCA has the power to force firms to withdraw or change products such as pensions, credit cards or investments if they don’t meet the minimum standards set for that product.

Banks and other financial institutions are supervised by the FCA to ensure they are treating their customers fairly, operate safely, are competing fairly and not taking unacceptable risks.

What does FCA Authorised mean?

All UK financial services firms, investment firms and consumer credit companies must be registered and authorised by the Financial Conduct Authority.

In order to be authorised a company must meet the FCA’s required standards. Once authorised a firm can be investigated by the FCA if it is thought they aren’t meeting these standards. The FCA has the power to order authorised firms to stop trading, prosecute them and get compensation for consumers.

What is the FCA register?

If a company is regulated by the FCA, or has been in the past, it will appear on the FCA register. You can search the register to find out more information about a financial firm including its contact details, what they are authorised to do and whether they are covered by the Financial Ombudsman Service and the Financial Services Compensation Scheme.

The Financial Services Register also lists firms that are offering financial products or services without the necessary authorisation. This includes firms that are operating financial scams. These firms are clearly marked on the register with red text and a warning symbol.

You can search the register by looking up a name, reference number or postcode.

It is a good idea to check the FCA Register before you engage with a new company or individual operating in the financial services industry. This will tell you if the company is regulated, in which case it must adhere to the FCA’s strict rules.

Checking the FCA register may also alert you to a scam. However, only scam firms that the FCA are already aware of appear on the register. If the firm or individual you are looking for isn’t on the register that doesn’t mean it isn’t a scam. It just means they aren’t authorised by the FCA and that it isn’t aware of the scam.

How does the FCA protect consumers?

The FCA aims to protect consumers by making sure that FCA authorised companies:

  • Treat their customers fairly
  • Provide them with appropriate products and services
  • Value their customer’s safety above their own profit or income

It does this by carefully checking firms before they are authorised then supervising how firms operate.

If an FCA authorised company or individual is thought to be breaking the FCA’s rules it will intervene. If its suspicions are proved correct then the FCA has the power to stop them trading, impose penalties and seek compensation for anyone affected by the issue.

The FCA also works to stop financial scams. It does this by operating a ScamSmart campaign to highlight signs of a scam.

If you are contacted by an unauthorised firm trying to involve you in a financial scam you should report it to the FCA so it can be added to its register. You can do this by calling 0800 111 6768, via the online form on the FCA website or by email at [email protected]

Image Source: Getty Images

About the author:

Ruth is a freelance journalist with 15 years of experience writing for national newspapers, magazines and websites. Specialising in savings, investments, pensions and property. Read more

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