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The Financial Conduct Authority (FCA) is a financial regulatory body in the
United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain,Usage is mixed. The Guardian' and Telegraph' use Britain as a synonym for the United Kingdom. Some prefer to use Britain as shorth ...

United Kingdom
, but operates independently of the UK Government, and is financed by charging fees to members of the financial services industry. The FCA regulates financial firms providing services to consumers and maintains the integrity of the financial markets in the United Kingdom. It focuses on the regulation of conduct by both retail and wholesale financial services firms.Archived here.
/ref> Like its predecessor the FSA, the FCA is structured as a
company limited by guarantee In British, Irish and Australian company law Corporate law (also known as business law or enterprise law or sometimes company law) is the body of law Law is a system A system is a group of Interaction, interacting or interrelated ...
. The FCA works alongside the Prudential Regulation Authority and the
Financial Policy Committee The Financial Policy Committee (FPC) is an official committee of the Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as th ...
to set regulatory requirements for the financial sector. The FCA is responsible for the conduct of around 58,000 businesses which employ 2.2 million people and contribute around £65.6 billion in annual tax revenue to the economy in the United Kingdom.


History

On 19 December 2012, the
Financial Services Act 2012 The Financial Services Act 2012 is an Act of Parliament, Act of the Parliament of the United Kingdom which implements a new regulatory framework for the financial system and financial services in the UK. It replaces the Financial Services Authorit ...
received royal assent, and it came into force on 1 April 2013. The Act created a new regulatory framework for financial services and abolished the Financial Services Authority. Specifically, the Act gave the
Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as the Kingdom of England, English Government's banker, and still one of the bankers for t ...

Bank of England
responsibility for financial stability, bringing together macro and micro prudential regulation, created a new regulatory structure consisting of the Bank of England's Financial Policy Committee, the Prudential Regulation Authority and the Financial Conduct Authority. In March 2020, the FCA introduced
strong customer authentication Strong customer authentication (SCA) is a requirement of the EU Payment Services Directive#Revised Directive on Payment Services (PSD2), Revised Directive on Payment Services (PSD2) on payment service providers within the European Economic Area. The ...
rules aiming to reduce fraud and improve security by requiring European banks to offer three layers of authentication when customers made online payments over €30 in Europe: * PIN code or a password *
Biometrics Biometrics are body measurements and calculations related to human characteristics. Biometrics authentication Authentication (from ''authentikos'', "real, genuine", from αὐθέντης ''authentes'', "author") is the act of proving an ...

Biometrics
such as a fingerprint * Physical device such as a phone.


Powers

The authority has significant powers, including the power to regulate conduct related to the marketing of financial products. It is able to specify minimum standards and to place requirements on products. It has the power to investigate organisations and individuals. In addition, the FCA is able to ban financial products for up to a year while considering an indefinite ban; it has the power to instruct firms to immediately retract or modify promotions which it finds to be misleading and to publish such decisions. Further, the FCA is able to freeze assets of individuals or organisations under investigation whether or not they are innocent or guilty. The authority has been responsible for regulating the consumer credit industry since 1 April 2014, taking over the role from the
Office of Fair Trading , type = Non-ministerial government department Non-ministerial government departments (NMGDs) are a type of Departments of the Government of the United Kingdom, department of the Government of the United Kingdom that deal with matters for which ...
. Research in 2021 published by the FCA suggested such warnings to consumers went unheard, or ignored. Fewer than one in 10 potential cryptocurrency buyers were aware of consumer warnings on the FCA website, and 12% of crypto users were not aware that these holdings were not protected by statutory compensation.


Payment Systems Regulator

In April 2015, the FCA created a separate body, the Payment Systems Regulator (PSR), in accordance with section 40 of the Financial Services (Banking Reform) Act 2013. The PSR's role is "to promote competition and innovation in payment systems, and ensure they work in the interests of the organisations and people that use them". On 20 June 2017, the PSR announced its final decision regarding reforms to the infrastructure of the payment systems in the United Kingdom in order to encourage "better and more innovative services for customers". The regulator's review from December 2016 found that the central infrastructure for the main retail payment systems in the United Kingdom –
Bacs Bacs Payment Schemes Limited (Bacs), previously known as Bankers' Automated Clearing System, is the organization that is responsible for the schemes behind the clearing and settlement of UK automated payment methods and Bacs Direct Credit, as ...
,
Faster Payments The Faster Payments Service (FPS) is a United Kingdom banking initiative to reduce payment times between different banks' customer accounts to typically a few seconds, from the three working days that transfers usually take using the long-establ ...
(FPS) and
LINK #REDIRECT Link Link or Links may refer to: Places * Link, West Virginia, an unincorporated community in the US * Link River, Klamath Falls, Oregon, US People with the name * Link (singer) (Lincoln Browder, born 1964), American R&B singer * L ...
– do not offer effective competition. Two main changes are required: * To undertake a competitive procurement process for future central infrastructure contracts. With this, the PSR hopes to ensure fair, open and transparent procurement of the central payment systems infrastructure and enable new technology providers to enter the market. * To adopt a common international messaging standard (ISO 20022) for Bacs and Faster Payments. This change aims to lower barriers and encourage new entrants to the market.


Sectors and firms


Banks

The Financial Services Act of 2012 set out a new system for regulating financial services in order to protect and improve the UK's economy. The FCA will supervise banks to: * Ensure they treat customers fairly * Encourage innovation and healthy competition * Help the FCA to identify potential risks early so they can take action to reduce the risks


Mutual societies

There are more than 10,000 mutual societies in the United Kingdom. The FCA are responsible for: * Registering new mutual societies * Keeping public records * Receiving annual returns


Financial advisers

Beginning December 31, 2012,
independent financial advisers Independent financial advisers (IFAs) are professionals who offer independent financial advice, advice on financial matters to their clients and recommend suitable financial products from the ''whole of the market''. The term was developed to refl ...
(IFAs) are legally obliged to follow
Retail Distribution Review The Financial Services Authority (FSA) was a quasi-judicial body accountable for the financial regulation, regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investment ...
(RDR) rules. In order to be classed as an IFA, a business must: * Offer a broad range of retail investment products * Give consumers unbiased and unrestricted advice based on comprehensive and fair market analysis


Leadership


Chief executive

In February 2011, it was confirmed that the new head of the FCA would be
Martin Wheatley Martin Wheatley is a British financier, formerly managing director of the Consumer and Markets Business Unit of the Financial Services Authority in the UK, and is the former CEO of the Financial Conduct Authority. In London Wheatley worked for t ...
, formerly chairman of Hong Kong's
Securities and Futures Commission The Securities and Futures Commission (SFC) of Hong Kong Hong Kong (; , ), officially the Hong Kong Special Administrative Region of the People's Republic of China (HKSAR), is a List of cities in China, city and Special administrative ...
. However, Wheatley's appointment was not put in front of the
Treasury Select Committee The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons The House of Commons is the name for the elected lower house A lower house is one of two chambers C ...
for a pre-appointment hearing. Instead, the Government stated it would put Wheatley and future chief executives forward for a pre-commencement hearing, i.e. after they had been formally appointed but before they began the role. In July 2015, Wheatley resigned his post at the FCA following a vote of no confidence by
George Osborne George Gideon Oliver Osborne (born Gideon Oliver Osborne; 23 May 1971) is a British politician and newspaper editor who served as Chancellor of the Exchequer The chancellor of the Exchequer, often abbreviated to the chancellor, is a seni ...

George Osborne
. In September 2015,
Tracey McDermott Tracey Elizabeth McDermott was the acting chief executive of Britain's Financial Conduct Authority (FCA) from September 2015 until 1 July 2016. Career From 2001 she was employed at the Financial Services Authority as director of supervision and a ...
took over from Wheatley as acting chief executive. Andrew Bailey was appointed chief executive on 26 January 2016. After Bailey moved to become the
Governor of the Bank of England The Governor of the Bank of England is the most senior position in the Bank of England. It is nominally a civil service post, but the appointment tends to be from within the bank, with the incumbent grooming their successor. The Governor of the Ban ...
, it was announced that Christopher Woolard would become the Interim Chief Executive. In June 2020, it was announced that Woolard would be succeeded on a permanent basis by
Nikhil Rathi Nikhil Rathi (born 5 August 1979) is the chief executive of the UK's Financial Conduct Authority (FCA). Early life Rathi is of British Indians, Indian descent, and grew up in Barrow-in-Furness, Cumbria, the son of Madhu and Dr Rajendra Rathi, a ...
.


List of chief executives

{, class="wikitable" , + !# !Name !Tenure , - , 1 ,
Martin Wheatley Martin Wheatley is a British financier, formerly managing director of the Consumer and Markets Business Unit of the Financial Services Authority in the UK, and is the former CEO of the Financial Conduct Authority. In London Wheatley worked for t ...
, 2013–2015 , - , - ,
Tracey McDermott Tracey Elizabeth McDermott was the acting chief executive of Britain's Financial Conduct Authority (FCA) from September 2015 until 1 July 2016. Career From 2001 she was employed at the Financial Services Authority as director of supervision and a ...
(''interim'') , 2015–2016 , - , 2 , Andrew Bailey , 2016–2020 , - , - , Christopher Woolard (''interim'') , 2020 , - , 3 ,
Nikhil Rathi Nikhil Rathi (born 5 August 1979) is the chief executive of the UK's Financial Conduct Authority (FCA). Early life Rathi is of British Indians, Indian descent, and grew up in Barrow-in-Furness, Cumbria, the son of Madhu and Dr Rajendra Rathi, a ...
, 2020–


Chairperson

In June 2012, it was confirmed that
John Griffith-Jones John Guthrie Griffith-Jones (born 11 May 1954) is a British accountant. He was chairman of the Financial Conduct Authority. Early life John Griffith-Jones was born on 11 May 1954. He is the son of Mervyn Griffith-Jones and Joan Baker. He was e ...
would become the non executive chair of the FCA once the FSA ceases operations in 2013. Griffith-Jones joined the FSA board in September 2012, as a non executive director and deputy chair.


Criticism

In June 2013, the Financial Conduct Authority was criticised by the Parliamentary Commission on Banking Standards in their report "Changing Banking for Good", which stated: The FCA was rebuked by the Treasury Select Committee for lack of concern over the increase in mortgage interest rates of the
Bank of Ireland Bank of Ireland Group plc ( ga, Banc na hÉireann) is a commercial bank A bank is a financial institution Financial institutions, otherwise known as banking institutions, are corporation A corporation is an organization—us ...
's subsidiary of the United Kingdom. There had been calls for the resignation of chairman John Griffith-Jones because of his responsibility for auditing HBOS as chairman of KPMG at the time of the
financial crisis of 2007–08 Finance is the study of financial institutions, financial markets and how they operate within the financial system. It is concerned with the creation and management of money Image:National-Debt-Gillray.jpeg, In a 1786 James Gillray caricatu ...
. There has also been criticism of Chief Executive
Martin Wheatley Martin Wheatley is a British financier, formerly managing director of the Consumer and Markets Business Unit of the Financial Services Authority in the UK, and is the former CEO of the Financial Conduct Authority. In London Wheatley worked for t ...
because of his responsibility for the minibond fiasco in Hong Kong. There were not the customary pre-appointment hearings for either John Griffith-Jones or Martin Wheatley, so that people could not disapprove of these appointments by submitting evidence to such hearings. On 10 December 2014, the FCA released a report from Simon Davis from inquiring into the events of 27/28 March 2014 relating to the press briefing of information in the FCA's 2014/15 Business Plan. The report recommended: * That there be substantial improvement in the procedures relating to the identification, control and release of price-sensitive information, * That the final version of the FCA's Business Plan should only be made available publicly to all market participants at the same time, * That the relevant review team address the issue of price-sensitive information in any assessment of a potential thematic review, and * That the FCA urgently put in place price and volume monitoring procedures, combined with an action plan for the effective management of the FCA's reaction to any issues involving the uncontrolled release of price-sensitive information originating from or involving the FCA. On 16 December 2014, the Treasury select committee commenced taking evidence on the press briefing. Shortly thereafter, committee chair Andrew Tyrie said it looked as if the FCA had been guilty of an "extraordinary blunder" and had created a "disorderly market" through its actions. In 2017, the FCA was criticised by MP
Chris Philp Christopher Ian Brian Mynott Philp (born 6 July 1976) is a British Conservative Party Conservative Party may refer to: Europe Current *Croatian Conservative Party, *Conservative Party (Czech Republic) *Conservative People's Party (Denmark) * ...

Chris Philp
, who sat on the
Treasury Select Committee The House of Commons Treasury Committee (often referred to as the Treasury Select Committee) is a select committee of the House of Commons The House of Commons is the name for the elected lower house A lower house is one of two chambers C ...
, for spending £66,000 on a new logo that was hardly different from their previous logo.


See also

* FCA Controlled Functions *
Financial Policy Committee The Financial Policy Committee (FPC) is an official committee of the Bank of England The Bank of England is the central bank of the United Kingdom and the model on which most modern central banks have been based. Established in 1694 to act as th ...
*
Financial Services Authority The Financial Services Authority (FSA) was a quasi-judicial body A quasi-judicial body is a non-judicial body which can interpret law. It is an entity such as an Arbitration panel or tribunal board, that can be a public administrative agency but ...
* Prudential Regulation Authority *
Fraud Advisory Panel The Fraud Advisory Panel is a United Kingdom, UK charitable organization, charitable organisation. Incorporated in 2001, the Panel focuses on offering advice and education to the general public on how to mitigate and avoid fraud. Panel members hav ...


References


External links

* {{authority control Financial Conduct Authority people Financial regulatory authorities of the United Kingdom Financial services companies established in 2013 Government agencies established in 2013 HM Treasury Organisations based in the London Borough of Newham Private companies limited by guarantee of the United Kingdom 2013 establishments in the United Kingdom Stratford, London United Kingdom banking law