The ‘Financial Conduct Authority’ is a self-governing supervisory entity responsible for regulating and authorizing the UK-based financial markets and financial services companies. The organization is also held accountable by the UK Treasury Department and the Parliament. The ‘Financial Services Authority’ (FSA), the predecessor of the current UK regulatory body (FCA), was accused of many scandals in the recent economic crisis of the UK. This crisis led to serious reforms sanctioned by the UK government resulting in the creation of ‘FCA’ and ‘Prudential Regulation Authority’ (PRA) as the new and reformed regulatory bodies. These reforms presented a whole new face of the financial service industry which was more effective and efficient. In essence, the Forex brokers that were previously regulated and supervised by FSA are now under the full authorization of FCA and PRA. The new regulators were granted the power to intervene and disrupt practices if they were against the set regulations and did not need to wait to enforce such disciplinary measures after the fact or occurrence of such scandals. FCA makes sure that business ethics and integrity are kept in check in all the financial activities, and every single investor or trader gets a fair treatment so the economy can flourish in its entirety. FCA oversees the business conduct of over 56000 companies (Including FCA licensed Forex brokers) in the UK alone in addition to regulating more than 18000 businesses as a prudential regulator. Everything financial related from Credit Cards, loans, pensions and all the way up to the big investments in giant financial entities that influence the economy one way or another are under the scrutiny of FCA.
Three main goals are at the top of FCA’s priorities; first and foremost to shield the customers at all costs by providing financial security, second watch over the financial markets by preserving the morality and honesty of the UK financial system as a whole, and third offer a safe and competitive ground to the customers with the hope of leading to economic growth. FCA also collaborates with consumer groups, trade associations, professional bodies, domestic regulators, EU legislators, as well as many other shareholders. FCA board consists of ten members: John Griffith-Jones - Chairman, Andrew Bailey - Chief Executive, Catherine Bradley, Amelia Fletcher OBE, Bradley Fried, Baroness Sarah Hogg, Ruth Kelly, Jane Platt, Sam Woods, and Christopher Woolard -Director of Strategy and Competition.
The ‘Financial Services Compensation Scheme’ (FSCS), founded in 2001 as another section of FCA and set up under the Financial Services and Markets Act 2000 (FSMA), is a deposit insurance and a compensation plan devised to protect the assets of the investors involved with the FCA regulated Financial Services Companies. Essentially, when a firm cannot execute its financial duties toward the clients, FSCS steps in to compensate the financial losses that the clients have endured. The compensation scheme of the FSCS, funded by levies on the PRA and FCA regulated companies, covers deposits, insurance policies, insurance brokering (including travel agencies and holiday providers that sell the said policy), investments, mortgages, and mortgage arrangement. Moreover, the European firms regulated by the UK home state regulators are also covered by the FSCS. The compensation services provided by FSCS are completely free of charge and automatic, and you’d be reimbursed for your losses if anything happened to your financial provider or they could not afford to pay the claims brought against them. It stands to reason that the FCA and PRA set the limits regarding the protection provided by the FSCS. Accordingly, the claims relevant to deposits, life insurance, and general insurance policies are supervised by PRA, and other types of business compensations are authorized by FCA. In the event of bankruptcy, the UK-regulated banks, building societies, credit unions and investment firms (including Forex brokers) are protected up to £85,000 (as of 2017) per individual, and if the savings are in a joint account, the compensation amount will double and goes as high as £170,000.
To find out if a financial firm is regulated by the FCA, you have to go this address, https://register.fca.org.uk/ and search the company name to acquire the information you need. On top of the page, you’ll see a search box with the following description: “Search by company, person, product, reference number or postcode.” You can use any of this info to search for the company of interest, just make sure that you have the correct spelling to avoid any mistakes. Below the search box, on the left corner, there is another option called “Advanced Search,” which you can use to target your inquiry more specifically. Here you can specify the type of business you’re looking for such as a Firm, Individual, or Collective Investment Scheme as well as the status of the company (Authorized, Unauthorized, etc.).