FCA – Financial Conduct Authority

The financial Conduct Authority is a regulatory finance body in the United Kingdom. This regulatory body works independent from the UK government and sources it’s financing from fees collected from members of the financial services industry.

On 1^st April 2013, the FCA and the Prudential Regulation Authority (PRA) started overseeing all the regulation activities on the financial services industry. The FCA is responsible for regulating the conduct of more than 26,000 firms in the financial industry and monitoring of prudential behaviour on more than 23,000 that are under the PRA’s umbrella.

The FCA is supposed to create an environment that is supportive of good conduct through regulation where opportunities and incentives for bad behaviour are limited and the potential cost might be high. They are tasked with the duty of making sure that the financial markets work well so that the UK’s financial services can be used without doubts. They are not biased on service delivery and it does not matter to them on the age or financial circumstances of the firm they are serving.

What roles does the FCA have?

• Protects the customers and make them trust the firms regulated by them
• Keep watch and protect the financial markets to make sure that integrity is enhanced in the UK financial System
• It is their duty to promote effective competition and ensure that consumers have a wide range of services to choose from

The FCA Objectives

1. One objective of the Financial Conduct Authority is to promote fair treatment of customers on their financial knowledge and understanding levels.
2. They also aim on engaging more with the consumers and having an understanding of their concerns and behaviours.
3. Have precise expectations of firms they regulate and clearly stipulate what the firms should expect from them
4. Be on the lookout for risks consumers may be exposed to and handle them before they take shape
5. They also need to tough and bold in strategizing on credible deterrence through the use of the powers bestowed on them.
6. Supervision of firms is another objective the hold and is part of their customer protection duty. They have their risk-based approach which means that they speculate of any risks and intervene early before the harm is spread to the consumers.

How is the FCA process on authorization and approval of individuals?

As I had mentioned earlier, the main function of the FCA is authorization of firms and individual approval. Through this, they make sure that firms and individuals who get into the financial industry meet their standards and have the necessary tools and skills to operate in the financial market.

Since the FCA has a competition duty, they are always keen on striking the balance between making sure that appropriate standards are met and check that they do not stifle competition and innovation. All this is enforced through performing regular check on their rules to make sure that they do not present barriers to entry.

Quality standards drafted by the FCA in UK should be met in order to make sure that consumers are protected and that quality services are being delivered.

Part of the FCA approval process requires that applicants are fully aware of the prudential requirements and take full responsibility for meeting the standards. The FCA also seeks to find out whether the applicants have proper understanding of their services and that customers are fully satisfied, through proper risk management and corporate culture.