What does the FCA do?

The Financial Conduct Authority regulates financial services in the UK. It has three statutory objectives: protecting consumers, protecting the integrity of the financial system, and promoting effective competition in the interests of consumers. Behind those objectives sit real powers - to authorise firms, supervise them, investigate them and stop them trading.

The three objectives

Protecting consumers

Most people use financial services at some point - bank accounts, loans, pensions, insurance. The FCA uses its authority to protect consumers in those interactions. Customers in vulnerable circumstances are a particular focus, because they are most at risk of being taken advantage of.

Maintaining market integrity

The FCA determines who can enter the financial markets and sets the standards a firm or individual must meet to be accepted. It then supervises those in the market to check the standards are being upheld. Where they are not, it can act - including issuing fines or stopping firms trading.

Promoting competition

Competition between firms gives customers better choice and better value. The FCA supports new entrants and makes it easier for customers to switch providers, while acting against dominant firms abusing their position.

These objectives are set out in the Financial Services and Markets Act 2000 (opens legislation.gov.uk in a new tab), as amended.

How the FCA enforces this

• Authorising firms and individuals before they can offer regulated financial services
• Monitoring and supervising how firms operate day to day
• Investigating misconduct and breaches of its rules
• Taking enforcement action, including fines, bans and legal proceedings

It also publishes rules, guidance and updates through the FCA Handbook (opens handbook.fca.org.uk in a new tab) to help firms stay compliant and keep customers informed.

Who has to comply

Any business or individual offering regulated financial services in the UK must be authorised by the FCA. Failing to comply with its rules can result in serious penalties, and carrying out a regulated activity without authorisation is a criminal offence.

If you are not certain whether what your business does is regulated, that question is worth settling before you start rather than after.