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The FCA has three operational objectives set out in the Financial Services and Markets Act 2000 (FSMA):
To protect consumers: This involves protecting consumers from unfair, misleading or fraudulent activities. It works to ensure that businesses provide consumers with appropriate products and services, and that there is a clear, fair, and not misleading provision of information to consumers. The FCA sets standards for products and checks that firms meet these standards. They also take action to prevent consumer harm, banning products or practices when necessary.
To protect and enhance the integrity of the UK financial system: This involves making sure that firms operate in the best interests of consumers and the market. This includes overseeing the conduct of firms and ensuring transparency and fairness in the market. They monitor firms' behaviour to detect market abuse, enforce rules on firms, and prosecute those involved in financial crime.
To promote competition in the interests of consumers: This involves ensuring that markets operate in a way that encourages competition and innovation. The FCA takes action against anti-competitive behaviour, removes barriers for firms entering the market, and ensures a level playing field for all participants.
More specifically, the FCA's functions include:
Regulatory Policy Development and Implementation: The FCA sets rules for conduct in financial markets and can create new rules or amend existing ones. It also consults with the industry and other stakeholders when making new rules.
Supervision: The FCA monitors firms to ensure they are meeting standards and following rules. This includes regular reporting by firms and visits to firms by FCA staff. They use a risk-based approach, focusing on firms and issues that pose the biggest risk to their objectives.
Enforcement: The FCA has strong powers to enforce their rules, including the ability to fine firms or individuals who breach regulations, and to ban products, services, or business practices. They can also take legal action to seek redress for consumers.
Authorising and Licensing: The FCA is responsible for authorising and licensing financial firms and individuals in the UK. Firms must meet certain conditions to get and keep their authorisation.
Promoting transparency: The FCA requires firms to publish certain information to help consumers make informed decisions. This includes information about fees, product performance, and the firm’s financial health.
Consumer protection and market integrity: The FCA has a range of tools to prevent consumer harm, including the ability to ban or impose requirements on financial products, services, or practices. They can also take action to ensure market integrity, such as enforcing rules on disclosure and market conduct.
International Engagement: The FCA engages with international regulators and other bodies to influence global standards and share information.
Competition advocacy and intervention: The FCA has a statutory operational objective to promote competition in the interest of consumers. This involves identifying potential competition issues and intervening to address these issues.
Financial crime prevention: The FCA takes steps to prevent financial crimes such as money laundering, fraud, and corrupt practices, including supervising firms' systems and controls for preventing financial crime, and taking enforcement action against firms and individuals who breach the rules.
Consumer outreach and education: The FCA provides information to help consumers make informed decisions about financial products and services. This includes publishing information on their website, producing guides, and running advertising campaigns.
Remember, the best way to get the most current and accurate information about the FCA's functions and operations is to visit their official website https://www.fca.org.uk/ or get in touch with them directly. They also produce a lot of useful information aimed at consumers, including guides and warnings about potential scams.
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