The Financial Conduct Authority is a regulatory body that operates independently of the government. It oversees financial bodies in the United Kingdom and receives funding through fees paid by its members. It partners with the Financial Policy Committee and the Prudential Regulation Authority to set regulations. The FCA’s activities generate billions in tax revenue for the British government.
From 2001 to 2013, the Financial Services Authority regulated financial entities in the United Kingdom. After the 2008 market crash, which also affected the United Kingdom, the British government started working to abolish the agency. In 2013, the government succeeded and split the FSA’s functions between two agencies:
The main objective of the FCA is to create and maintain fair markets that serve the best interests of all parties involved. This includes the rights of consumers, the growth of the economy, and the profitability of businesses.
To this end, the organization engages in three main activities:
The FCA regulates all financial activities in the market. Even non-profit organizations need to meet financial requirements. Before regulated entities can receive authorization, they must first show that they meet established requirements. The FCA then continues to supervise the entities to ensure they continue to uphold those standards.
The FCA estimates that the entire process can take anywhere from six months to a year. It starts with filling out an application, paying the fee, and submitting it to the FCA. Companies must ensure immediate readiness to abide by the requirements when they apply. There is no grace period to get in line.
Once approved, companies receive six-digit Firm Reference Numbers. The FCA also has unique identifiers to track funds and products. The organization has successfully registered so many firms that it estimates it will need to move to seven-digit identifying numbers by 2023.
When companies fail to abide by the regulations, enforcement can be swift and expensive. Consequently, companies should read the rules carefully and prioritize compliance throughout business operations. These are some of the many enforcement powers granted to the FCA:
Most financial entities operating in the UK have two main FCA-related fears. The first is losing the right or authorization to conduct lawful business. Next in line is the potential for high fines. In 2021, financial entities faced fines totaling £567,765,219.95. Here are some of the most significant individual fines making up that total:
One way in which UK businesses must comply is by archiving all messages sent and received by employees. This helps companies keep track of communications, monitor employee activity, and meet record-keeping requirements.
Businesses need to choose a message archiving solution that meets FCA compliance requirements. These standards vary depending on the type of business and its specific regulatory obligations, but there are some general best practices that all companies should follow:
The LeapXpert team is constantly reviewing changes in regulations worldwide. This helps us determine how best we can continue to serve clients through message and call capturing and archiving services that tick all the boxes. Book your demo today to see what we can do for you.