FCA Regulation

FCA Regulation

All financial services and companies in the United Kingdom must be registered by the Financial Conduct Authority (FCA). The FCA is responsible for proper management of financial markets in the UK, licensing financial services, ensuring the ethical treatment of customers, and fair competition between companies. 

Many financial services that claim to be based in the UK may not have an FCA licence. Avoid trading with any broker that has clients based in the UK but is not FCA registered. Also, some brokers may say they have an FCA licence when in fact they falsify this information. Confirm all such claims before opening a brokerage account. If you have lost money to an FCA-regulated broker, contact the FCA and seek fund recovery assistance.

MyChargeBack professionals are well-versed in the fund recovery process. We consult with clients and assist them in gathering evidence and presenting a claim. We have extensive experience working with chargeback and fund recovery claims and are familiar with how regulators and banks deal with these cases. Our expertise can improve the chances of fund recovery.

What Is the FCA? 

The FCA is the Financial Conduct Authority which oversees UK financial markets and all financial services based in the UK. It was founded in 2012 in the aftermath of the global financial crisis of 2008 with the intention of proper regulation of the UK’s financial sector. 

The FCA has three main goals:

  • Protect UK consumers
  • Protect the UK financial system
  • Ensure fair competition

For consumers, the main concern is the first objective, although fair competition and the smooth running of the UK financial system are also relevant to individuals. 

Why FCA Regulation Is Important

FCA regulations are designed to ensure that companies that provide financial services show transparency and are engaging in fair and ethical practices. The FCA helps companies pinpoint situations that can involve conflicts of interest and aids in resolving disputes. 

The FCA also ensures fair competition between companies and will often evaluate situations in which one company may have an unfair advantage. The organisation investigates suspected cartels that can threaten consumer choice and rights or abuses of dominant positions, such as a leading company charging prices that are so low that they are likely to drive competitors out of business. 

One of the FCA’s most important responsibilities is to authorise brokers and grant licences. Since the FCA is an independent entity, it charges a fee for licences. The fee is meant to cover tasks related to providing oversight, dealing with disputes, and customer relations. The FCA handles customer complaints and warns the public about unauthorised trading schemes as well as brokers that falsely claim to be licensed by the FCA.

How to Ensure a Broker Has FCA Regulation

Many brokers claim to have an FCA licence. The claim is good enough for many customers. Unfortunately, too often, these customers realise too late that they have opened an account with a broker that is not FCA regulated. 

It is essential to double-check claims of FCA licensing. This takes only a few minutes and is as easy as going to the FCA website, typing in the broker’s name, and confirming that there is an FCA licence and it is still current.

 An FCA licence is a permit to allow legal trading involving UK citizens. Just as people may falsify a driver’s licence or another form of identification, some brokers try to win over customers with fake claims of licensing or even work using a counterfeit license. When checking the broker’s licence, make sure it is current, has not been revoked, or that the broker is not facing disciplinary procedure. 

Another problem to be aware of is that of clone brokers. The FCA often warns of brokers that adopt a similar name to an FCA-regulated broker but who nonetheless have no licence. Check all names carefully to ensure they are identical to the regulated broker. 

How the FCA Helps with Broker Complaints and Disputes

One of the best reasons to open an account only with a regulated broker is that if something goes amiss or if there is a broker dispute, you can file a complaint with a regulator who can address the issue. If a broker has no licence, it may be a question of going to a government office or law enforcement who are often deeply immersed in other more immediate tasks. 

Also, unregulated brokers have a tendency to shut off all communication and disappear, so it can be a complicated matter of tracking them down first before dealing with a broker dispute and fund recovery. An FCA-regulated broker is unlikely to disappear and the broker dispute can be dealt with more promptly than with an unlicensed broker. 

The first step is to complain directly to the broker and give them the chance to resolve the issue. All of this communication should be in writing so it can be presented to the FCA if the broker refuses to return funds. If the broker does not want to settle with the customer, the next step is to file a complaint with the FCA. It is important to make the right impression from the outset, to present the case in the proper way, and to provide the right kind of evidence, including copies of written communication.

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