In the U.K., the Financial Conduct Authority (FCA) is the independent body that is vested with the responsibility of overseeing and regulating the operations of financial services companies, including the forex brokers. The FCA, formerly known by the name the Financial Services Authority (FSA), was set up in 2013 on the basis of the UK Government’s finding that the FSA was not adequately equipped to deal with financial irregularities. The agency’s inadequacy became very evident during the 2007-2008 financial crisis.
The FCA is not dependent on Government funds to carry out its functions. However, the agency is answerable both to the Treasury and the Parliament. The FCA operates with the help of membership fees paid by financial companies that are registered with the agency and by raising funds through other channels. As a result, the FCA is forced to maintain a fair code of conduct as far as all the firms providing financial services to residents in the country.
FCA Regulation – How Does It Work?
The FCA has been vested with a great deal of power to ensure that all financial services companies operating in the UK follow certain operating standards. The FCA can revoke the licenses financial services companies, scrutinize promotional and marketing material, audit the accounts of companies, and make sure that the clients get a fair deal when availing the services of these financial companies. The agency is also given the power to suspend the activities of any firm for a period of up to one year if allegations of fraudulent activities are raised against the company. The agency also has the power to suspend licenses of companies indefinitely if they feel it is necessary. As a result, firms that operate under the regulatory purview of the FCA would often ensure the safety and security of their clients. They will never work against the interests of their clients.
FCA Regulated Forex Brokers Are Reliable
A forex broker in the UK is required to be licensed and regulated by the FCA as per the law. As such, the FCA regulated forex brokers are highly reliable because they are bound to follow or comply with the various laws that are outlined in the code of conduct section of the 2012 Financial Services Act. Further, the FCA has the freedom to amend the laws as and when they deem necessary so as to safeguard the interests of the traders and investors.
FCA Regulation – Benefits To Customers
As the regulating authority for overseeing the functioning of financial companies, including forex brokers, the FCA’s main focus is protecting traders against different types of frauds as well as financial crimes. Further, the FCA guarantees the market integrity by monitoring the activities of all of the registered financial service providers and ensuring the health of the U.K. financial system.
Additionally, the FCA promotes healthy competition within the market by enabling companies to attract customers in a fair and honest manner. Moreover, the agency enforces stringent rules and carefully monitors the activities of the members so that the companies do not take advantage of the loopholes in the system.
Final Thoughts
Now that you have some idea as to the FCA operates, let us understand the three reasons why you should have FCA, UK regulated forex brokers:
#1: An FCA regulated forex broker in the UK is obliged to provide customer-centric services
You can expect regulated brokers to treat you fairly and without any discrimination, ensure clear communication and cater to your needs rather than focusing on their profits.
You cannot expect unregulated brokers to behave in the same manner. Sometimes, even the most highly recommended but unregulated brokers do not serve their customers properly.
#2: The FCA provides a solution to globalization
Globalization has resulted in rogue brokers setting up operations in the U.K. The FCA works with overseas regulators to curtail the activities of such brokers.
#3: An FCA regulated forex broker in the UK is accountable
The regulated forex brokers in the U.K. are required to comply with certain standards set by the FCA to maintain their status. Although the agency cannot guarantee total protection, those brokers that do not comply with the regulatory requirements are held accountable for their actions.
In order to sustain your forex trading business, you need to protect your hard earned money. It is, therefore, imperative that you work with an FCA regulated forex broker in the UK so as to achieve your financial goals.
