What is FCA in the UK? What does FCA mean?


As an international capital investment market, in order to facilitate the supervision of the foreign exchange market, countries that regulate the foreign exchange market generally have corresponding regulatory agencies. The UK FCA is one of them.

Newcomers who have just come into contact with foreign exchange may often see that the foreign exchange broker claims to be regulated by the UK FCA and looks very powerful. Do you know what this FCA is?

What is FCA in the UK? What does FCA mean?

FCA Official Website


FCA Introduction

The Financial Services Authority (FSA) has been replaced by two new regulatory bodies since 2013, namely the Financial Conduct Authority,FCA and Prudential Regulation Authority (PRA). The regulatory authority over brokers will be fully transferred from the FSA to the FCA.

The FCA is the central regulatory body for the financial investment services industry in the UK, responsible for regulating banking, insurance, and investment businesses. FCA is currently the most comprehensive and legally enforceable financial regulatory agency in the world, serving as a model for financial regulatory agencies in various countries to learn from, and its authority is highly recognized by investors.

FCA is an independent institution that is not part of the Bank of England. Starting from April 1, 2013, the FCA's responsibility is to promote effective competition, ensure the normal operation of relevant markets, and regulate the behavior of all financial service companies. This includes preventing market abuse and helping consumers obtain fair trading opportunities. At the same time, the FCA is also responsible for prudential supervision of financial service companies that are not regulated by the PRA, such as asset management companies and independent financial advisors.

FCA Responsibilities

The UK is currently the country with the most complete and sound financial services in the world, and its authorization procedures are very strict. Only some companies can obtain FCA authorization.

Benefits of FCA regulation:

1. The FCA's authorization standards are very strict, and the authorized unit must have funds that are only used to support regulatory business, and regularly report its funding status to the FCA on a monthly basis.

2. FCA has the right to inspect all company records and customer accounts at any time in specific circumstances to ensure compliance with regulations.

3. The regulatory agency has full-time compliance auditors independent of management.

4. The FCA requires authorized units to treat customers fairly in order to maintain the system and operations. At the same time, it is necessary to demonstrate to the FCA that it treats every customer equally.

5. The authorized unit needs to prove to the FCA that the company has sufficient working capital to pay for customer deposits and potential company expenses.

6. External auditors must independently review the account and client funding processes and report directly to the FCA.

FCA Funding Guarantee

According to the FCA's guidelines for the use of customer funds, brokers are required to separate all funds payable to customers on a daily basis and keep them in a bank licensed by the FCA. The broker only holds these funds as a trustee.

FCA Compensation Plan

The Financial Services Compensation Scheme (FSCS) is the last resort for clients of financial services companies regulated by the Financial Conduct Authority (FCA) in the UK. This means that if the UK Financial Conduct Authority determines that an authorized financial services company is unable to repay its debts, the Financial Services Compensation Scheme will compensate under the Investment Industry Protection Scheme.

For beginners in foreign exchange, choosing a broker must pay attention to their regulatory system. A foreign exchange broker with a strict regulatory system is subject to strict inspection and evaluation before entering the foreign exchange investment market, which can prevent you from being deceived by the broker.

【 EBC Platform Risk Reminder and Disclaimer 】: There are risks in the market, and investment needs to be cautious. This article does not constitute investment advice.

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