Financial Conduct Authority (FCA)
The Financial Conduct Authority (FCA) is the regulator of the Financial Services industry in the UK. Since 2013, the FCA has been responsible for enforcing the provisions of the Legal Aid Sentencing and Punishment of Offenders Act 2012 (LASPO) in relation to the firms that it regulates, including those provisions that relate to personal injury cases.
Why was the FCA set up?
The FCA was established by the Financial Services Act. It was set up after the financial crisis of 2008 to manage and contain risks within the industry more effectively. The FCA effectively replaced the Financial Services Authority as the leading regulator of financial services-related activity in the UK.
How does it work?
The Financial Conduct Authority has three main statutory objectives which were set up under the Financial Services and Markets Act of 2000, and amended by the Financial Services Act of 2012. These are:
- To protect consumers
- To protect and enhance the integrity of the UK finance system
- To promote healthy competition between financial services providers in the interest of the consumer
The latter objective made major changes to how financial firms such as banks are regulated within the UK.
How much power does it have?
The FCA is a powerful legal entity. It can enforce its mandate by making new rules, and has authoritative investigative and enforcement powers.
How is it funded?
The FCA is an independent body and does not receive any funding from the Government, allowing it to retain impartiality. It has the right to raise its own fees.
The FCA is mainly funded by authorised firms that carry out regulated FCA approved activities. By charging firms periodically the FCA covers its funds required to carry out its statutory duties.
It works out fees based on the type of activities undertaken by a firm, and the scale of the activities. It also includes the regulatory costs incurred by the FCA.
The FCA and Personal Injury
The Ministry of Justice introduced a key piece of legislation, Legal Aid Sentencing and Punishment of Offenders Act 2012, that came into force on 1 April 2013. Under the Act, the Financial Conduct Authority supervises and enforces provisions relating to the referral of personal injury cases by the financial firms that it regulates. This activity includes liaising with the Claims Management Regulator (CMR) and the Solicitors Regulation Authority (SRA).