|Formed||1 April 2013|
|Headquarters|| 12 Endeavour Square |
London E20 1JN
|Annual budget||£632.6m (2019/2020)|
The Financial Conduct Authority (FCA) is a financial regulatory body in the 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. : 140Like its predecessor the FSA, the FCA is structured as a company limited by guarantee.
The FCA works alongside the Prudential Regulation Authority and the Financial Policy Committee 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.
On 19 December 2012, the Financial Services Act 2012 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 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 rulesaiming 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:
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".
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 compliance in view of the Money Laundering Act 2017.
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. : 143 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.
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.
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:
There are more than 10,000 mutual societies in the United Kingdom. : 64 The FCA are responsible for:
Beginning December 31, 2012, independent financial advisers (IFAs) are legally obliged to follow Retail Distribution Review (RDR) rules.In order to be classed as an IFA, a business must:
In February 2011, it was confirmed that the new head of the FCA would be Martin Wheatley, formerly chairman of Hong Kong's Securities and Futures Commission.However, Wheatley's appointment was not put in front of the Treasury Select Committee 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.In September 2015, Tracey McDermott 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, 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.
|#||Name||Tenure||Tenure start||Tenure end||Tenure length|
|1||Martin Wheatley||2013–2015||1 April 2013||11 September 2015||2 years and 164 days|
|–||Tracey McDermott (interim)||2015–2016||12 September 2015||30 June 2016||293 days|
|2||Andrew Bailey||2016–2020||1 July 2016||15 March 2020||3 years and 259 days|
|–||Christopher Woolard (interim)||2020||16 March 2020||30 September 2020||199 days|
|3||Nikhil Rathi||2020–||1 October 2020||Incumbent||1 year and 328 days|
In June 2012, it was confirmed that John Griffith-Jones 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 became chair of the FCA and PSR in April 2018. In October 2021, he resigned from this position and is scheduled leave the post in spring 2022.
On February 7, 2022, Richard Lloyd has been named to start acting as interim FCA chair from June 2022.
|–||Richard Lloyd (interim)||2022–|
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 interest rate swap scandal has cost small businesses dear. Many had no concept of the instrument they were being pressured to buy. This applies to embedded swaps as much as standalone products. The response by the FSA and FCA has been inadequate. If, as they claim, the regulators do not have the power to deal with these abuses, then it is for the Government and Parliament to ensure that the regulators have the powers they need to enable restitution to be made for this egregious mis-selling.—"Changing Banking for Good: Report of the Parliamentary Commission on Banking Standards", House of Lords, House of Commons
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'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.There has also been criticism of Chief Executive Martin Wheatley 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. : 10–12
The report recommended:
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.
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled by either a government or non-government organization. Financial regulation has also influenced the structure of banking sectors by increasing the variety of financial products available. Financial regulation forms one of three legal categories which constitutes the content of financial law, the other two being market practices and case law.
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. Its board was appointed by the Treasury, although it operated independently of government. It was structured as a company limited by guarantee and was funded entirely by fees charged to the financial services industry.
The Australian Prudential Regulation Authority (APRA) is a statutory authority of the Australian Government and the prudential regulator of the Australian financial services industry. APRA was established on 1 July 1998 in response to the recommendations of the Wallis Inquiry. APRA's authority and scope is determined pursuant to the Australian Prudential Regulation Authority Act, 1998 (Cth).
The Financial Services and Markets Act 2000 is an Act of the Parliament of the United Kingdom that created the Financial Services Authority (FSA) as a regulator for insurance, investment business and banking, and the Financial Ombudsman Service to resolve disputes as a free alternative to the courts.
In general, compliance means conforming to a rule, such as a specification, policy, standard or law. Compliance has traditionally been explained by reference to the deterrence theory, according to which punishing a behavior will decrease the violations both by the wrongdoer and by others. This view has been supported by economic theory, which has framed punishment in terms of costs and has explained compliance in terms of a cost-benefit equilibrium. However, psychological research on motivation provides an alternative view: granting rewards or imposing fines for a certain behavior is a form of extrinsic motivation that weakens intrinsic motivation and ultimately undermines compliance.
Sir Paul Tucker is a British economist, central banker, and author. He was formerly the Deputy Governor of the Bank of England, with responsibility for financial stability, and served on the Bank's Monetary Policy Committee from June 2002 until October 2013 and its interim and then full Financial Policy Committee from June 2011. In November 2012 he was turned down for the position of governor in favour of Mark Carney. In June 2013, Tucker announced that he would leave the Bank of England, and later that he would be moving to Harvard. He was knighted in the 2014 New Year Honours for services to central banking. His book, Unelected Power, was published in May 2018.
National Westminster Bank, commonly known as NatWest, is a major retail and commercial bank in the United Kingdom. It was established in 1968 by the merger of National Provincial Bank and Westminster Bank. In 2000, it became part of The Royal Bank of Scotland Group, which was re-named NatWest Group in 2020. Following ringfencing of the group's core domestic business, the bank became a direct subsidiary of NatWest Holdings; NatWest Markets comprises the non-ringfenced investment banking arm. The British government currently owns around 48.1%, previously 54.7% of NatWest Group after spending 45 billion pounds bailing out the lender in 2008.
HBOS plc was a banking and insurance company in the United Kingdom, a wholly owned subsidiary of the Lloyds Banking Group, having been taken over in January 2009. It was the holding company for Bank of Scotland plc, which operated the Bank of Scotland and Halifax brands in the UK, as well as HBOS Australia and HBOS Insurance & Investment Group Limited, the group's insurance division.
Andrew John Bailey is a British central banker who has been Governor of the Bank of England since 16 March 2020.
Promontory Financial Group, a wholly owned subsidiary of IBM, is a global consulting firm that advises clients on a variety of financial services matters, including regulatory issues, compliance, risk management, liquidity, restructuring, acquisitions, due diligence, internal investigations and cyber security.
The Prudential Regulation Authority (PRA) is a United Kingdom financial services regulatory body, formed as one of the successors to the Financial Services Authority (FSA). The authority is responsible for the prudential regulation and supervision of banks, building societies, credit unions, insurers and major investment firms. It sets standards and supervises financial institutions at the level of the individual firm. Although it was initially structured as a limited company wholly owned by the Bank of England, the PRA's functions have now been taken over by the Bank and are exercised through the Prudential Regulation Committee. The company has since been liquidated.
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.
Financial regulation in Australia is extensive and detailed.
The Controlled Functions of the Financial Conduct Authority (FCA) are simplifying code names given to various functions within the financial services and relating to the carrying on of regulated activities by a firm. These are specified, under section 59 of the Financial Services and Markets Act which still stands as the reference after the FSA split into the FCA and the PRA. The FCA is solely responsible for all applications for approval for FCA Designated Controlled Functions for all FCA solo regulated firms.
Binance is a cryptocurrency exchange which is the largest exchange in the world in terms of daily trading volume of cryptocurrencies. It was founded in 2017 and is registered in the Cayman Islands.
Charles David Randell 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 speaks widely of the need to exploit new data and digital capabilities to help regulators become more efficient and effective. He was appointed CBE in the 2016 New Year Honours.
Jonathan Haskel is a British economist, and professor of economics at Imperial College Business School.
The general notion of cryptocurrencies in Europe denotes the processes of legislative regulation, distribution, circulation and storage of cryptocurrencies in Europe.