United Atlantic Legal Services welcomes you back! Last week we did a brief comparison between United States and United Kingdom financial service regulators. In this post we take a deeper dive into the United Kingdom’s side of the pond.
As a reminder, United Atlantic Legal Services, is a boutique law firm focused exclusively on investment advisers, works with financial professionals in both United States and United Kingdom. We assist these professionals with registration and acquisition due diligence services. Please contact us if you are interested in working as an investment adviser in the United States.
Who is the Financial Conduct Authority?
The Financial Conduct Authority (FCA) is the regulatory body responsible for ensuring that financial markets in the United Kingdom are fair, transparent, and efficient. It was established in April 2013 and replaced the Financial Services Authority (FSA). The FCA operates independently of the government and is funded by fees levied on the firms it regulates.
What are the responsibilities and functions of the FCA?
The FCA has a wide range of responsibilities, including the regulation of banks, building societies, insurance companies, financial advisers, and other financial services providers. Its main objective is to protect consumers and ensure that the financial sector operates in a way that promotes competition and innovation, while maintaining the stability of the financial system.
- Investigation and Enforcement. One of the key functions of the FCA is to enforce regulations and investigate any misconduct by regulated firms or individuals. The FCA has the power to impose fines, revoke licenses, and take legal action against those who violate regulations. The FCA also has the authority to bring criminal charges against individuals and companies that engage in fraudulent activities.
- Competition, Innovation, and Education. The FCA also works to promote competition in the financial sector. It encourages innovation and new entrants to the market, which can help to drive down costs and improve services for consumers. The FCA also promotes financial education and awareness to help consumers make informed decisions about their finances.
- Monitoring. Another important role of the FCA is to oversee the conduct of financial markets. It monitors financial markets for any signs of abuse, such as insider trading or market manipulation, and takes action to prevent and deter such activities. The FCA also works to ensure that financial products are sold in a way that is fair and transparent, and that consumers are not misled or exploited.
- Policy. In addition to its regulatory and enforcement functions, the FCA also plays a role in shaping policy and legislation related to the financial sector. It provides advice and guidance to government and other regulatory bodies, and works with international organizations to promote global financial stability.
Oversight
As we discussed last week, the FCA is accountable to the United Kingdom Parliament and is overseen by the Treasury. The Treasury appoints the FCA’s board members and sets its budget. The FCA also works closely with other regulatory bodies in the UK, such as the Prudential Regulation Authority (PRA) and the Bank of England, to ensure the stability and integrity of the UK financial system. Additionally, the FCA is subject to scrutiny by the National Audit Office (NAO), which is responsible for auditing the FCA’s finances and operations to ensure that it is fulfilling its duties effectively and efficiently.
Conclusion
Overall, the Financial Conduct Authority plays a critical role in ensuring the integrity of the financial sector in the United Kingdom. Its work helps to protect consumers, promote competition, and maintain the stability of the financial system. By enforcing regulations, investigating misconduct, promoting competition, and overseeing financial markets, the FCA helps to ensure that the financial sector operates in a way that benefits everyone.
About the Author
Michael Rasmussen is the founder of United Atlantic Legal Services. He is a licensed attorney in Florida and registered solicitor in the United Kingdom. Michael has acted as General Counsel and Chief Compliance Officer to several investment advisers, including private fund managers, responsible for the management of billions of dollars in client assets.
Michael is also the founder of FinProLaw, an online learning platform where Michael has created courses designed for investment adviser compliance professionals. These courses include:
- Investment Adviser Compliance Essential for Chief Compliance Officers
- Foundations of Investment Adviser Compliance
- What is a “Security”?
- Investment Adviser Marketing Rule
- Regulation A – Exemption from Registration
- Regulation Crowdfunding – Exemption from Registration
- Regulation D – Exemption from Registration
Investment adviser firms who are also clients of United Atlantic Legal Services can receive many of these courses at a significantly reduced fee or, in some cases, at no expense. Contact us today or visit the FinProLaw to learn more.
Please visit Michael’s website to learn more about Michael and his insights into the investment adviser industry. He can also be found on LinkedIn.