Financial Conduct Authority

Overview

The Financial Conduct Authority (FCA) is the conduct regulator for the United Kingdom’s financial services firms and markets. Parliament created it to regulate how firms behave — not how safe their balance sheets are — and it also acts as the prudential regulator for all firms it solely authorises FCA. It is responsible for the conduct of around 42,000 businesses and sets the specific prudential standards for roughly 17,000 firms GOV.UK. It is an independent public body funded entirely by the fees it charges regulated firms, and it is accountable to the Treasury and to Parliament FCA.

What it is known for

Parliament gave the FCA a single strategic objective: to ensure financial services markets function well. Beneath that sit three operational objectives — to protect consumers, to protect and enhance the integrity of the UK financial system, and to promote effective competition in the interests of consumers GOV.UK. Since August 2023 it has also carried a secondary objective to facilitate the international competitiveness and growth of the UK economy, which applies only to its general functions such as rule-making — not to individual authorisation, supervision or enforcement decisions FCA. The FCA authorises firms and individuals, supervises conduct, sets standards through its Consumer Duty — firms must act in good faith, avoid foreseeable harm and deliver fair value — and punishes misconduct FCA.

The 2013 FSA split and current structure

The FCA’s defining feature is that it is only one half of a divided system. Before 1 April 2013, the Financial Services Authority (FSA) was the single UK regulator, responsible for both prudential safety and conduct. On that date the FSA was replaced by two sister regulators: the FCA and the Prudential Regulation Authority (PRA) Bank of England. The PRA, part of the Bank of England, prudentially supervises banks, building societies, credit unions, insurers and large investment firms; for those firms the FCA acts as the conduct regulator. The FCA is the prudential supervisor for all other firms it regulates, and the two regulators coordinate and share information where their objectives overlap FCA.

The split was a deliberate post-crisis design: the FSA’s dual mandate was judged to have let prudential firefighting crowd out conduct supervision in the run-up to 2008, so the new FCA was built to focus on conduct alone Bank of England.

Powers and enforcement

Both the FCA and the PRA have an enforcement remit and can impose sanctions under the Financial Services and Markets Act 2000 (FSMA) Bank of England. The FCA’s supervision is judgement-led: it aims to pre-empt poor conduct, moves quickly to stop harm, refers firms for enforcement investigation where necessary, and seeks redress for customers via redress schemes, direct engagement or the Financial Ombudsman Service FCA.

Its enforcement posture is now visibly recalibrating. The stated ambition is to run fewer but faster investigations: 2025 fines reached approximately £124 million, up from £42.6 million the prior year, while the 2026 year-to-date total stood at just over £16 million Foreign Policy Journal. Earlier era-defining penalties included a £264.8 million fine against NatWest in 2021 over money-laundering control failures, and a combined £42 million on Barclays across two financial-crime cases Foreign Policy Journal.

That ambition has collided with tribunal pushback. In the Banque Havilland case the Upper Tribunal cut an FCA fine from £10 million to £4 million, calling the original figure arbitrary — one of a series of reductions forcing the regulator to rethink how it sets penalties Foreign Policy Journal. In 2026 the FCA consulted on changes to its Decision Procedure and Penalties Manual (DEPP) to improve the transparency and consistency of penalty-setting, with feedback closing in August 2026 Foreign Policy Journal.

Two new frontiers mark the 2026 agenda: non-financial misconduct — bullying, harassment and violence now qualify as misconduct under its code of conduct, with the rules extending from banks to non-bank firms from September 2026 — and scrutiny of off-channel communications such as WhatsApp, mirroring enforcement by the US Securities and Exchange Commission Foreign Policy Journal.

Leadership and governance

The FCA is led by chief executive Nikhil Rathi, whom Chancellor Rachel Reeves reappointed in 2025 for a second five-year term running to September 2030 FStech. Rathi first took the role in October 2020 and has overseen the Consumer Duty, the most substantial changes to the UK listing regime in over three decades, and a streamlining of the rulebook FStech. The Board is chaired by Ashley Alder GOV.UK. In 2026 the Board added Lea Paterson, a former Bank of England executive, and Matthew Tobin, a former Slaughter and May partner — each appointed for an initial three-year term starting 1 October 2026 after Treasury-run recruitment GOV.UK.

Timeline

• 2013 — On 1 April the FSA is replaced by the FCA and the PRA, splitting conduct and prudential regulation Bank of England.
• 2016 — The Senior Managers and Certification Regime embeds individual accountability at authorised firms Bank of England.
• 2020 — Nikhil Rathi becomes chief executive in October FStech.
• 2023 — The secondary international competitiveness and growth objective takes effect in August FCA.
• 2025 — Rathi is reappointed to September 2030; the FCA publishes a new five-year strategy FStech.
• 2026 — The DEPP penalty-framework overhaul is consulted on; non-financial misconduct rules extend to non-bank firms in September Foreign Policy Journal.

Related entities

• Prudential Regulation Authority — the Bank of England’s prudential arm and the FCA’s sister regulator since the 2013 split; for PRA-supervised firms the FCA acts only as conduct regulator Bank of England.
• US Securities and Exchange Commission — the US markets regulator whose off-channel communications enforcement the FCA has followed Foreign Policy Journal.
• UK Parliament — created the FCA through statute; the FCA is accountable to Parliament and to the Treasury for how it exercises its functions FCA.

What this profile does not claim

This profile does not claim the FCA supervises the prudential safety of banks or insurers — that is the PRA’s role FCA. It does not state the outcome of the 2026 DEPP consultation, which was not decided at the time of writing. It does not assert the FCA’s current staff headcount or year-by-year fine totals beyond the figures explicitly sourced above. It does not conflate the UK FCA with any other organisation using those initials, nor the old UK Financial Services Authority (dissolved in 2013) with other countries’ agencies using the FSA initials.