Regulators

UK Financial Conduct Authority (FCA)

On April 1, 2013, the UK Financial Conduct Authority (FCA) was formally established.

Forex Regulatory Tips

According to FCA's official website, the UK Financial Conduct Authority ("FCA") regulates leveraged foreign exchange transactions.

Organization Profile

Organization History
FCA (Financial Conduct Authority) is the UK Financial Conduct Authority, established on April 1, 2013 and headquartered in London, UK. Its predecessor was the UK Financial Services Authority (FSA).
Institutional Functions
The FCA has taken over from the FSA its oversight of conduct in the UK financial markets and the prudential duties associated with it. It is committed to creating a sound financial market order for individuals, large and medium-sized enterprises and economies, so that consumers can conduct transactions efficiently and fairly.
The FCA oversees the UK financial markets and the conduct of more than 59,000 financial services companies, conducts prudential supervision of more than 49,000 companies and sets special standards for 19,000 companies.
The FCA is an independent public body that operates by charging fees to regulated businesses. It is not part of the Bank of England, is accountable to the UK Treasury, and is accountable to the UK financial system and parliament.
Institutional Goals
The work and objectives of the FCA are governed by the UK Financial Services and Markets Act 2000 (FSMA). The FCA works in conjunction with consumer groups, trade associations, professional bodies, domestic regulatory authorities, EU legislatures and numerous relevant authorities. Therefore, it adopts a management approach commensurate with its terms of reference, prioritizing those regions and businesses that pose higher risks to financial markets.
The strategic objective of the FCA is to ensure that the market mechanism works effectively.
The implementation goals of FCA are:
(1) Consumer protection--provide moderate protection for consumers
(2) Maintaining financial markets - protecting and enhancing the integrity of the UK financial system
(3) Promoting market competition--promoting effective competition related to the interests of consumers

FSA and PRA
FSA (Financial Service Authority) is the UK Financial Services Authority, which regulates the UK financial market, performs statutory duties and is responsible to the UK Treasury.
Both the FSA and the Bank of England (BOE) are subordinate to the Ministry of Finance. The FSA is responsible for the strict supervision of all financial service institutions registered in the UK, while the BOE mainly maintains the stability of the financial system.
On April 1, 2013, the UK Financial Services Authority (FSA) was replaced by two parallel regulators, the UK Financial Conduct Authority (FCA) and the UK Prudential Financial Regulation Authority (PRA). FCA is responsible for the supervision of UK financial market conduct. and related prudential regulation.
PRA (Prudential Regulation Authority) is the UK Prudential Regulation Authority, established under the UK Financial Services Act (2012) and subordinate to the Bank of England.
Prudential regulation requires companies to hold sufficient capital and formulate appropriate risk control measures. If the business is not operating in a safe and reasonable manner, or the insurance company is not adequately protecting policyholders, the PRA can step in and take action.
The Bank of England conducts prudential supervision of financial services companies through the PRA, which is currently responsible for the prudential supervision of about 1,500 financial companies (banks, building societies, credit unions, insurance companies and major investment companies).

Licence application

Application Requirements
(1) Minimum capital requirements
The UK requirements for own funds of investment companies are as follows:
(2) Physical office requirements: yes and must be in the UK
Application Process
(1) Submit the complete application form;
(2) Payment;
(3) Provide further information, instructions or certifications of the person in charge of the application, possibly requiring a meeting with the person in charge of the application.
Application link: https://www.fca.org.uk/firms/authorisation/how-to-apply/financial-services
Application Duration
6-12 months

License Fee

Annual license fee/seat fee: Yes, depending on the scope of financial business
Fee per business permission: yes
Application fee: as follows

Regulatory Inquiries

The first step: enter the FCA regulatory inquiry page
Method 1: Visit the FCA query address: https://register.fca.org.uk/

Step 2: Enter the supervision number or company name in English

Note: If you search by the English name of the company, there may be several companies. In this case, please judge according to the registration number.
Step 3: Confirm the supervision status (Status)
Common Status:
(1) Regulated status: Authorised;
(2) No longer regulated status: No longer authorised;
(3) EU regulatory status: EEA Authorised;
(4) Appointed representative status;
Here are some examples:
(1) Authorised description is currently under supervision

(2) No longer authorised indicates that supervision has been cancelled

(3) EEA Authorised indicates that it is authorized by the EU and only allowed to conduct business in the UK. The real regulator is not the FCA, but the regulator of the EU country where the company is located.
(4) Appointed representative is an AR license. The AR authorized representative can be an individual or an enterprise. The representative obtains the authorization and license of the FCA-regulated or EU-regulated company to conduct investment services, and the authorized company is responsible for the business behavior of the authorized representative.

Step 4: Confirm Contact Details: Website, Address, Phone, Email
Confirming the website address is a very critical step. Many dummy companies use their similar website addresses to deceive investors. FCA website also publishes warning messages about counterfeit companies from time to time. Usually compliant, foreign exchange dealers in business will register a phone number, website or email address on the contact details (as shown in the figure below). The mailbox is a corporate mailbox, usually prefixed with www., which is the trader's website. Investors can confirm the dealer information through the contact information registered on the FCA.

Step 5: Confirm if it is protected by the UK Financial Services Compensation Protection Scheme (FSCS)
As shown in the figure below, there is FSCS in the status bar, and a √ is marked in front of it, indicating that there is a compensation plan for FSCS. The purpose of FSCS: If a company regulated by FCA goes bankrupt, investors whose accounts are regulated by FCA in the UK can apply to FSCS for compensation of the upper limit of 50,000 pounds, which means that the investment amount less than or equal to 50,000 pounds can generally be fully compensated.

Step 6: Confirm whether you can hold and control client funds
1. The "Client Money" column of traders who can hold and control client funds, as shown below ↓

2. It cannot be held but may be able to control customer funds under certain conditions, as shown in the figure below

3. The European regulatory status EEA Authorised cannot accommodate and control client funds under the FCA regulations, because its real regulatory agency is not the FCA, but the EU country where the company is registered. The security of such companies depends on where they are Regulatory regulations of the EU country of the place of registration.
4. Whether the Authorised representative (AR) license can accommodate and control client funds depends on the authorized company. If the authorized company can accommodate and control client funds, AR's client funds are deposited into the isolated account designated by the authorized company.

Step 7: Confirm whether the financial services that Investment Type can provide include rolling spot forex contract (foreign exchange margin trading)

Listed below are the items that an FCA full-licensed foreign exchange dealer generally includes, including Rolling Spot Forex Contract spot rolling foreign exchange trading contract (that is, foreign exchange margin trading).
Making arrangements with a view to transactions in investments
Dealing in investments as agent
Dealing in investments as principal
Safeguarding and administration of assets
Step 8: Everyone should pay particular attention to whether the range of customers that their financial services can face includes retail customers (Retail), after all, most of them are retail foreign exchange investors.
Customer Type (customer range) will list the customer range that each major financial service can face: Eligible Counterparty (qualified counterparty), professional (institutional customer), retail (retail customer).

Regulatory complaints

When you are not satisfied with your investment, you can file a complaint in 3 steps:
Step 1: Contact the Forex Dealer directly
The best way is to complain directly to the Forex dealer:
1) It is best to file a complaint by mail for record keeping;
2) When the company receives the complaint, it will inform you in writing that it has received your complaint.
Step 2: If you are not satisfied with the processing result of the foreign exchange dealer, you can contact the UK financial complaint agency FOS to file a complaint
If you are not satisfied with the dealer's response, or they reject your complaint or you do not hear from them within 8 weeks, you can contact FOS for a free complaint.
There are two ways to complain:
(1) Submit a complaint to FOS online.
Online complaint address: https://help.financial-ombudsman.org.uk/help
Online Complaint Form Translation Reference Template (please click the image below to view the template):
(2) Submit a complaint to FOS by mail.
Email Complaint Address: [email protected]
When making a complaint by mail, the address of the complaint form to be downloaded: http://www.financial-ombudsman.org.uk/consumer/form/complaint_form.pdf
Complaint form translation reference template (please click the image below to view the template):
Step 3: File a complaint in court
If you are not satisfied with the FOS decision and do not intend to seek other complaints resolution, you can take a complaint to court. Proceedings can be brought in the County Courts or Superior Courts of England, Wales and Northern Ireland, with the Scottish County Courts handling most minor complaints.

Example of punishment

Announcement link about punishment:
https://www.fca.org.uk/search-results?search_term=rolling%20spot%20forex%20exchange

FAQs

1. What are the general forex trading scams?
The process of most investors being deceived: At the beginning, they received investment income and mistakenly believed that the investment was successful. When more money was invested, the account was revoked and the fraudulent company could not be contacted.
Many scam companies claim to be based in the UK and are regulated by the Financial Conduct Authority (FCA).
2. Get to know forex deck companies
Dummy companies will usually use the FCA regulated company name, registration number and address, but will use their own telephone, address and website. Some even use outdated contact information registered with the Bureau of Industry and Commerce.
There are also deck companies that claim to be an overseas company, but they do not have complete contact information and registered URLs.
Some may even copy the URL of the real regulated company, changing only small details like phone numbers.
3. How to avoid us falling into forex trading scams?
https://www.fca.org.uk/consumers/protect-yourself-scams
When doing foreign exchange transactions with any company, we should first check whether the company is regulated by the UK Financial Conduct Authority. If the company isn't regulated, it's more than likely a scam company. At the same time, we can also query through the blacklist of the UK Financial Conduct Authority; the query address is as follows:
https://www.fca.org.uk/scamsmart/warning-list
If a company's contact information is not available in FCA or it claims that the information is out of date, please call FCA's customer service line: 0800 111 6768
We can determine whether a company is a dummy company by first asking for their company's registration number and contact information, and then calling their switchboard number in the FCA registration information to check. It is recommended not to use the mail they provide

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