Financial Conduct Authority

The Financial Conduct Authority is a financial regulatory body in the United Kingdom. It 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. Like 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.

History

The Financial Services Act 2012 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.
On 26 October 2015, the FCA brought in rules banning regulated financial services firms from offering premium rate 084, 087 or 09 telephone numbers for customer contact.
With effect from 14 September 2019, the FCA introduced strong customer authentication rules as required by the Revised Directive on Payment Services, aiming to reduce fraud and improve security by requiring payment services providers to use two of the following three types of authentication when customers make online payments over €30 in the EEA:

PIN code or a password
Biometrics such as a fingerprint
Physical device such as a phone.

The FCA published new Listing Rules in 2024, aiming to simplify the UK listings regime, marking the most significant changes in over three decades. These rules, effective from 29 July 2024, created a single listing category and streamlined eligibility criteria to encourage a wider range of companies to issue shares in the UK.

Payment Systems Regulator

In April 2015, the FCA created a separate entity, the Payment Systems Regulator, in accordance with section 40 of the Financial Services 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". Part 5 of the Financial Services Act 2013 was amended in 2015, removing "an unintended restriction on the ability of the PSR to exercise its powers for the purpose of requiring access to be granted to systems designated under the Settlement Finality Directive". After this, the PSR's powers applied to any payment system to which the access provisions of the Payment Services Directive of 2007 applied.
From May 2019 some victims of authorized push payment fraud are eligible to receive a refund under the Contingent Reimbursement Model Scheme, a voluntary scheme overseen by the Payment Systems Regulator that provides protections for customers of signatory firms, subject to a number of exclusions.

Anti-money laundering supervision

The Office for Professional Body Anti-Money Laundering Supervision 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.

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.
Furthermore, the FCA is able to freeze assets of individuals or organisations under investigation, regardless of whether 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.
In July 2023, the FCA announced reforms aiming to curb the use of social media by 'finfluencers' to encourage the purchasing of harmful financial products by UK consumers. Among the reforms was a ban on crypto incentives, such as 'refer a friend' bonuses, a compulsion for finfluencers to have clear risk warnings and for products to have a 24-hour cooling period to give first-time investors the time to adequately consider their investment decision. The move came following a significant rise in social media promotion of financial products by finfluencers in 2022, with 14 times more having been posted than the previous year.

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 supervises 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 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 31 December 2012, independent financial advisers are legally obliged to follow Retail Distribution Review 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.

Cryptoasset Service Providers

FCA serves as the anti-money laundering and counter-terrorist financing supervisor for cryptoasset businesses under the Money Laundering, Terrorist Financing and Transfer of Funds Regulations 2017. Any firm intending to carry out cryptoasset activities within the UK must register with the FCA prior to commencing operations. Failure to register or comply with the MLRs can result in enforcement actions, including potential criminal and civil penalties.

Financial Regulators Complaints Commissioner

The Financial Regulators Complaints Commissioner serves as an independent body that handles complaints specifically against the Financial Conduct Authority. This means that if individuals or organizations are dissatisfied with the way the FCA has handled a situation, made a decision, or conducted its duties, they can escalate their complaint to the FRCC for an impartial assessment.
The FRCC provides a mechanism for individuals and entities to seek redress if they believe the FCA has acted improperly or unfairly. The body examines the complaint independently of the FCA, reviewing the evidence and determining whether the FCA acted reasonably and fairly in the circumstances.
The FRCC's remit in relation to the FCA includes complaints about a wide range of issues related to the FCA's regulatory functions, such as:

How the FCA handled a specific case or investigation
Delays or inefficiencies in the FCA's processes
The conduct or professionalism of FCA staff
The FCA's policies or procedures.
WealthTek case

In April 2023, the FCA took action against WealthTek Limited Liability Partnership, a wealth management firm, due to serious regulatory and operational issues. The FCA ordered WealthTek to cease operations and appointed Joint Special Administrators from BDO LLP. The regulator identified potential regulatory breaches concerning client money and custody assets, as well as potential criminal offences of fraud and money laundering. The FCA's investigation revealed a potential shortfall of £81.4 million in client assets and money associated with WealthTek. As part of its actions, the FCA obtained a worldwide order to freeze assets belonging to John Dance, WealthTek's principal partner, up to the value of £40 million. In December 2024, the FCA charged Dance with multiple offences related to WealthTek, including fraud, money laundering, and making false representations about the firm's regulatory permissions. The charges allege that Dance misappropriated approximately £64 million of client funds between January 2020 and April 2023.

Leadership

Chief executive

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 after he was criticised by the chancellor, George Osborne. In September 2015, Tracey McDermott took over from Wheatley as acting chief executive.
Andrew Bailey was appointed chief executive in January 2016. After Bailey became Governor of the Bank of England, it was announced that Christopher Woolard would be the interim chief executive. In June 2020, it was announced that Woolard would be succeeded on a permanent basis by Nikhil Rathi. In April 2025 Rathi was reappointed for a second five-year term, until 2030.