The Role of the Financial Conduct Authority

The original Financial Services Authority (FSA), was an independent non-governmental body whose role was to regulate all activity relating to the financial services industry in the UK. It was set up by the Financial Services and Markets Act 2000 and was directly responsible to the Treasury Ministers and through them to Parliament. The FSA was financed by the organisations it regulated and was a company limited by guarantee.

The original Financial Services Authority (FSA), was an independent non-governmental body whose role was to regulate all activity relating to the financial services industry in the UK. It was set up by the Financial Services and Markets Act 2000 and was directly responsible to the Treasury Ministers and through them to Parliament. The FSA was financed by the organisations it regulated and was a company limited by guarantee.

It has now been split into two separate regulatory authorities, the Financial Conduct Authority, FCA, and the Prudential Regulatory Authority, PRA.

The FCA has four main roles:

* Regulating – by supervising the conduct of firms, and regulating the prudential standards of those firms not covered by the Prudential Regulation Authority.

* Protecting – ensuring firms stick to the rules and consumers don’t fall victim to scams or get tied in to unfair contracts.

* Championing – ensuring the financial services industry treats consumers fairly and keeps to their rules and standards.

* Enforcement – there are real and meaningful consequences for those firms or individuals who don’t play by the rules.

 

Under the legislation, any person or firm carrying out a ‘regulated activity’ within the UK must be authorised by the FCA unless a statutory exemption applies. A breach of this may be a criminal offence resulting in a maximum of two years imprisonment and/or a fine upon a successful indictment.

For an ‘activity’ to be a ‘regulated activity’ it must be carried out ‘…by way of business’.

For most letting agencies a regulated activity will mean the promotion or sale of any financial product or service such as advising on and arranging regulated mortgage contracts, selling or administering insurance.