Financial Conduct Authority

What is the Financial Conduct Authority (FCA)?

The Financial Conduct Authority (FCA) took over certain powers from the FSA in April 2013. Like the FSA before it, the FCA is responsible for the regulation of the financial services industry in the UK.

The FCA supervises the conduct of financial firms by ensuring that regulated firms adhere to the rules and maintain high standards. The FCA has powers to intervene when regulated firms fail to ‘treat customers fairly’ or behave in ways which risks the financial stability of the financial services marketplace. Their powers have already been exercised, heavy fines have been levied and bans on individuals and firm given.

The FCA achieves its objectives by:

• Continuous conduct assessment for large firms and regular assessment for smaller firms
• Monitoring products and other issues to ensure firms ‘play fair’ and don’t compromise consumer interests
• Responding quickly and decisively to events or problems that threaten the integrity of the industry
• Ensuring firms compensate consumers when necessary

In addition to its regulatory and supervisory responsibilities, the FCA also acts as a ‘consumer champion’ to ensure consumers get a fair deal. The FCA acts as a consumer champion by ensuring that regulated firms offer consumers the most appropriate product for their needs, ensuring that financial advisers give unbiased advice and requires regulated firms to train their staff so that they are knowledgeable and behave ethically.

Regulation of Financial Claims Management Companies

From the 1st April 2019, the Financial Conduct Authority (FCA) has taken over regulation from the Financial Claims Management Regulator (CMR). This change followed a new Act of Parliament, The Financial Guidance and Claims Act 2018 which gave the FCA the powers required to transfer regulation from the CMR also extending regulation to Scotland. Financial Claims Management Companies (CMCs) are now required to be regulated and authorised by the FCA, initially under a ‘temporary permission’ granted by the FCA following an application process. During 2019 firms who have been granted ‘temporary permission’ are required to apply for ‘full authorisation’ to continue offering their services to Consumers; this also applies to marketing firms who offer client referrals to CMCs.