What is the FCA (Financial Conduct Authority)?

The Financial Conduct Authority (FCA) is an organisation that regulates the financial services industry within the UK that operates independently of the government.

This role includes protecting consumers and promoting healthy competition between financial service providers.

What is the Focus of the FCA?

The FCA focuses its efforts on regulating the conduct of both retail and wholesale financial services. Therefore, it is responsible for setting the regulatory requirements and checking the conduct of around 58,000 businesses.

There are several areas in which the FCA has powers, this includes:

  • Regulating conduct of financial service providers.
  • Investigating both organisations and individuals.
  • The FCA is able to ban certain financial products.
  • The power and ability to instruct firms to modify that may be misleading to consumer.

FCA 7 Key Areas

There are 7 key FCA compliances that are considered the ‘gold standard’ for financial regulation.

These can help to increase confidence for customers and promote trust within a business as long as they gave met compliance requirements. These compliance requirements are as follows:

Communication structure.

A communication structure is a requirement of FCA compliance.

This requirement is for a business to have adequate communication channels within an organisation or business.

Therefore, the FCA also defines regulations on how decisions are passed down to staff through these communication channels.

Communication structures are a part of helping to evaluate and complying with FCA requirements. Additionally, this includes policies, procedures and important elements of communications.

Responding to Clients.

The FCA requires that management of a business collects and acts sufficiently upon clients feedback provides employees with training on how to respond correctly to such feedback.

As a result, having the ability to receive, collect and act on client information and feedback is important for any business.

The feedback given by clients helps a company and/or business to identify issues and failings. Also, this provides guidance and solutions on how to improve the services a business provides.

Management Behaviour – FCA Guidance

The FCA considers any individual in a management position as an essential part of the role of example setting.

Therefore, the FCA expect that managers will guide staff using their own behaviour as a good example. This requires excellent communication from managers that goes beyond verbal or written practices.

Corporate governance and ethics are essential parts of FCA compliance that should be carefully considered and enacted.

Financial Promotions – FCA Guidance

The FCA rewire that any business or company that communicates or provide financial promotions is clear and understandable for the consumer.

This means the product is not misleading and that they are accurate and clearly display any important information.

Third-Party Relationships

The FCA require that a business or company keep records of any contracts or agreements that may be made with a third-party supplier.

As a result, collecting and storing this information before engagement is critical to compliance and FCA regulations.

Staff Training – FCA Guidance

The FCA specifies that there should be special training requirements adhered to for staff that concern FCA compliance and Anti-money laundering.

Therefore, to comply with FCA standards of staff training, all information must be kept up to date, management should attend regular workshops or refresher courses.

Record-Keeping Requirements

The FCA carry out tasks of supervision of financial services, in order for this to happen correctly, a business or organisation must keep records such as personnel records and any assessment records.

Therefore, records that need to be kept also include transactions and client activity. However, to keep records correctly training should be undertaken by concerned parties on competence, supervision and document handling as there are set rules and regulations on how records must be kept.