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, is a country in Europe, off the north-western coast of the continental mainland. It comprises England, Scotland, Wales and North ...

, 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.
Like its predecessor the FSA, the FCA is structured as a

company limited by guarantee In British, Australian, Bermudian, Hong Kong and Irish company law (and previously New Zealand), a company limited by guarantee (CLG) is a type of corporation used primarily (but not exclusively) for non-profit organisations that require legal pe ...

. 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, modelled on the already well established Monetary Policy Committee. It was announced in 2010 as a new body responsible for monitoring the economy of the United Kin ...

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 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 Authority with two new ...

received

royal assent Royal assent is the method by which a monarch formally approves an act of the legislature, either directly or through an official acting on the monarch's behalf. In some jurisdictions, royal assent is equivalent to promulgation, while in other ...

, 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 English Government's banker, and still one of the bankers for the Government of ...

responsibility for financial stability, bringing together macro and micro prudential regulation, and 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 Revised Directive on Payment Services (PSD2) on payment service providers within the European Economic Area. The requirement ensures that electronic payments are performed with multi-f ...

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. Biometric authentication (or realistic authentication) is used in computer science as a form of identification and access control. It is also used to identify in ...

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

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".

Anti-money laundering supervision

The Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is based within the FCA. It was established in January 2018 to oversee the 22 accountancy and legal professional bodies which supervise anti-

money laundering Money laundering is the process of concealing the origin of money, obtained from illicit activities such as drug trafficking, corruption, embezzlement or gambling, by converting it into a legitimate source. It is a crime in many jurisdictions ...

compliance in view of the

Money Laundering Act 2017 Money is any item or verifiable record that is generally accepted as payment for goods and services and repayment of debts, such as taxes, in a particular country or socio-economic context. The primary functions which distinguish money are as ...

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 The Office of Fair Trading (OFT) was a non-ministerial government department of the United Kingdom, established by the Fair Trading Act 1973, which enforced both consumer protection and competition law, acting as the United Kingdom's economic ...

. 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.

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, and 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, and receiving annual returns.

Financial advisers

Beginning December 31, 2012,

independent financial advisers Independent financial advisers (IFAs) are professionals who offer independent advice on financial matters to their clients and recommend suitable financial products from the ''whole of the market''. The term was developed to reflect a United Kingd ...

(IFAs) are legally obliged to follow

Retail Distribution Review The Financial Services Authority (FSA) was a quasi-judicial body accountable for the regulation of the financial services industry in the United Kingdom between 2001 and 2013. It was founded as the Securities and Investments Board (SIB) in 1985 ...

(RDR) rules. In order to be classed as an IFA, a business must offer a broad range of retail investment products and 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 is the independent statutory body charged with regulating the securities and futures markets in Hong Kong. The SFC is responsible for fostering an orderly securities and futures market ...

. 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 in the Parliament of the United Kingdom. The remit of the committee is to examine the expenditure, administ ...

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 former British politician and newspaper editor who served as Chancellor of the Exchequer from 2010 to 2016 and as First Secretary of State from 2015 to 2016 in the ...

. 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 Ba ...

, 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 Indian descent, and grew up in Barrow-in-Furness, Cumbria, the son of Madhu and Dr Rajendra Rathi, a local magistrat ...

List of chief executives

{, class="wikitable" , + !# !Name !Tenure !Tenure start !Tenure end !Tenure length , - , 1 ,

, 2013–2015 , 1 April 2013 , 11 September 2015 , , - , – ,

(''interim'') , 2015–2016 , 12 September 2015 , 30 June 2016 , , - , 2 , Andrew Bailey , 2016–2020 , 1 July 2016 , 15 March 2020 , , - , – , Christopher Woolard (''interim'') , 2020 , 16 March 2020 , 30 September 2020 , , - , 3 ,

, 2020– , 1 October 2020 , ''Incumbent'' ,

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 ...

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.

Charles Randell Charles David Randell (born June 1958) became chairman of Britain's Financial Conduct Authority and Chair of the Payments Systems Regulator in April 2018. Charles has been a key supporter of transforming the FCA into a data-led regulator, and sp ...

became chair of the FCA and PSR in April 2018. In October 2021, he resigned from this position and is scheduled to leave the post in Spring 2022. On February 7, 2022, Richard Lloyd was named to begin serving as interim FCA chair from June 2022.

List of chairmen

{, class="wikitable" , + !# !Name !Tenure , - , 1 ,

, 2013–2018 , - , 2 ,

, 2018–2022 , - , – , Richard Lloyd (''interim'') , 2022–

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 operation in Ireland and one of the traditional Big Four Irish banks. Historically the premier banking organisation in Ireland, the Bank occupies a unique position in Iris ...

'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 and discipline of money, currency and capital assets. It is related to, but not synonymous with economics, the study of production, distribution, and consumption of money, assets, goods and services (the discipline of fina ...

. There has also been criticism of Chief Executive

because of his responsibility for the minibond fiasco in Hong Kong. On 10 December 2014, the FCA released a report from Simon Davis from Clifford Chance LLP 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.Inman, P.
"Financial Conduct Authority director quit over insurance review fallout"
''

The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers ''The Observer'' and ''The Guardian Weekly'', ''The Guardian'' is part of the Gu ...

'', 16 December 2014.

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