What is the Financial Conduct Authority (FCA)?

You’ve no doubt heard of the FCA, but do you know what it is and what they do? Keep reading to learn more about the Financial Conduct Authority and how it works.

What is the Financial Conduct Authority?

The Financial Conduct Authority, or the FCA, is a UK financial regulatory body that regulates the conduct of the financial services industry. Before setting up their firm, anyone operating in the financial services sector must be monitored and authorised to trade by the FCA.

The regulatory body exists to protect consumers and ensure fair competition in the marketplace by setting standards that financial firms must adhere to. If they don’t comply, the FCA has significant powers to freeze assets, investigate companies, help consumers receive compensation, impose fines, and more.

What does the FCA do?

There are a few things that fall under the remit of the FCA:

• It maintains the integrity of the financial market
• It protects consumers, ensuring financial services are fair and honest
• The FCA currently supervises over 42,000 firms, all operating in the financial sector
• It regulates marketing practices and can ban harmful financial products

How does the Financial Conduct Authority protect consumers?

It protects consumers from unfair and dishonest financial services by consistently checking that the firms regulated by it are complying with its high standards. They want consumers to access financial services that aren’t misleading in a fair market, and by authorising and monitoring firms before they can enter the financial services market in the UK, they help protect consumers before the firm can even get in front of an audience.

Are business loans regulated by the FCA?

Most business loans aren’t regulated by the FCA, but there are some exceptions. If you’re a sole trader or a small partnership (with up to three partners) borrowing less than £25,000, your small business loan may be protected by the FCA. However, if you’re a limited company, a larger partnership, or you apply for a loan of more than £25,000, your agreement will typically not be regulated by the Financial Conduct Authority.

Are bridging loans regulated by the FCA?

Yes and no. If you take out bridging finance as an individual and it’s secured against a residential property that you or a close family member will live in, the loan will be regulated by the FCA. However, if you’re a business taking out a bridging loan for commercial or investment purposes, the loan will usually be unregulated. Whether the bridging loan is regulated depends on the type of property it’s secured against, i.e., residential or commercial, and whether it’s for business purposes.

Is Capalona authorised and regulated by the FCA?

Yes, operating under our trading name of Sorodo Ltd, we are authorised and regulated by the Financial Conduct Authority for regulated Credit Broking activities. We are not a lender; instead, we act as a credit broker.

We function as an agent of TrueLayer, which is authorised and regulated by the FCA. Through TrueLayer, we access customers’ banking data via a secure API. It’s access to this data through open banking that helps us match customers’ financial needs with the right business funding.