Regulatory organisation FCA
Financial Conduct Authority (FCA) is an independent non-governmental financial regulator under the control of the Ministry of Finance of the UK. Previously, the regulator FCA was called the FSA (Financial Services Authority). But with the release of a new British law from 1 April 2013 on the control of financial markets "Directorate for financial regulation and supervision in the UK" (FSA) split into two knobs: "Finance activity" (FCA) and "On prudential supervision" (PRA). In fact, the FCA has remained the same goals and objectives, and its predecessor the FSA, but has narrowed list of companies that fall under the jurisdiction of the regulator (mainly brokers, small and medium-sized banks, investment companies and foundations), and greatly expanded powers that the FCA can apply to them in case of detection of violations of rules and fraud. As for the PRA, a subsidiary of the Bank of England, the regulator monitors the activities of large financial institutions such as major banks and insurance companies.
Objectives of the FCA are:
- guarantees to market participants in accordance with the UK legislation;
- maintaining financial stability of UK;
- protection of investors ' rights.
- creating conditions for the transparency of financial markets;
- contribution to the reduction of financial crime.
The core objectives of the FCA include:
- guarantee the safety of consumers of financial services;
- organization and maintenance of fair competition;
- ensuring the integrity of the financial system in the UK.
In fact, financial markets are under full control of the Bank of England and regulatory bodies FCA and PRA are responsible for regulating the activity of over 50 thousand financial companies, monitor the performance of their duties in front of their customers, and also carry out measures to prevent fraud. So, the FCA may restrict the advertising of financial services and even ban them, if it is determined that financial services have higher risks.
To obtain a license of the FCA is quite simple. You need to fill out an application, pay a membership fee of up to 25 thousand British pounds, to provide a business plan and financial statements for last year. But to keep the license of the FCA is much more complicated, as the regulator constantly carries out inspections and audits, reviews monthly reports of the company, requiring brokers information about each concluded their transaction, and most important condition is that the broker kept the money of their clients in segregated accounts separate from their capital. In case of detection of violations of these requirements, the FCA not only may cancel a broker's license, but also maximally inform the society about the violations of this company, undermining its credibility and will negatively affect future activities.
That is why FCA is one of the most reliable regulators, and brokers are trying to get a license, opening a subsidiary in the UK. For investors, the FCA serves as a guarantee of their investments even in the event of bankruptcy of the company, and for brokers FCA is a good advertisement of their activity as on the FCA's website published an open list of companies that have received her license.
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