What is the FCA?

The Financial Conduct Authority (FCA) is a non-government, independent body that is responsible for the regulation of the financial services industry in the United Kingdom. They regulate approximately 51,000 financial services companies and markets across the country.

The aim of the FCA is to ensure that the financial markets are fair, effective and honest. Their focus is to ensure that consumers get a fair deal. The authority works to ensure that markets work well for all consumers, which includes individuals and businesses, benefiting the economy. This is done by regulating the conduct of approximately 51,000 businesses, supervising 49,000 companies and setting standards for around eighteen thousand firms.

There are now new rules and regulations in the short term loan industry.

Establishment and Regulation

The FCA was established on 1 April 2013 with the focus of taking over the responsibility for conduct and regulation from the Financial Services Authority (FSA). They regulate the industry by requiring that firms and individuals must be registered and authorised to carry out activities.

Before authorisation is granted, the companies must show that they meet a number of different requirements, after which they are supervised to ensure that the rules and standards set out by the FCA are being met. Failing to meet the standards, the FCA has a number of enforcement powers that are used.

Working closely with the Prudential Regulation Authority (PRA), which regulates around one thousand five hundred banks, credit unions, investment companies, building societies and insurers.

Why Is the FCA Important?

Everyone in the United Kingdom will find that financial services are critical in their lives, from credit and debit cards to loans, investments and pensions. How the financial market works impacts everyone across the country. The UK financial services industry contribute approximately £75 billion in tax each year, employing over one million people. When the financial services industry works fairly and benefit their consumers, it builds confidence in the United Kingdom.

The FCA uses a three year strategy to ensure that their objective of monitoring the market to ensure it functions well.  Their objectives include:

  • Protection of the UK consumer
  • Promotion of competition in the best interest of the consumer
  • Protection of the financial market, improving the UK financial system integrity.

This independent body is funded by the fees charged to regulated firms, they are accountable to Parliament and the Treasury in the United Kingdom. They are regulated by the Financial Services and Markets Act 2000 (FSMA), working with consumers, professional bodies, trade associations, international partners and stakeholders. They regulate through prioritisation, working on firms and areas that pose a high risk to consumers and their objectives.

FCA Performance

The FCA measures their performance, always looking for areas where they can improve. Each year they identify what actions need to be taken to achieve the objectives, which are outlined in the Business Plan with full reporting in the Annual Report. Outcomes and metrics are published, as part of their transparency objective, along with performance levels they have achieved during regulatory function.


Every UK financial services provider, consumer credit companies and investment companies have to be registered and authorised by the FCA in order to operate. Application can take up to twelve months to complete. After which, the company must show that they meet the standards and regulations, working closely with the FCA in an open manner.

Minimum standards are set out by the FCA for pensions, ISA’s, investments and credit cards, which companies must meet in order to enter the market. Any products that short fall are ordered to be changed or withdrawn completely. The FCA has the ability to ban any financial product for up to a year and can impose an indefinite ban thereafter.