We regulate the conduct of around 42,000 businesses in the UK to ensure that financial markets work well. Find out more about our role.
Our role
Financial markets must be honest, competitive and fair so consumers get a fair deal. We work to ensure these markets work well for individuals, for businesses, and for the growth and competitiveness of the UK economy.
- We regulate the conduct of around 42,000 businesses.
- We prudentially supervise around 41,000 firms.
- Around 17,000 firms are subject to the prudential standards in our Handbook.
We focus on reducing and preventing serious harm, setting higher standards and promoting competition and positive change.
We were established on 1 April 2013, taking over conduct and relevant prudential regulation from the Financial Services Authority (FSA).
We work across the UK with a head office in London, offices in Leeds and Edinburgh and colleagues in Belfast and Cardiff.
Why we do it
Financial services play a critical role in the lives of everyone in the UK, from junior ISAs to pensions, direct debits to credit cards, loans to investments.
How well financial markets work has a fundamental impact on us all.
UK financial services employ over 1.1 million people and, alongside related professional services, contribute an estimated £100 billion in tax per year.
Based on our policy and enforcement work, we estimate that we add at least £14 of benefits to society for every £1 we spend on our running costs.
If UK markets work well, competitively and fairly they benefit customers, staff and shareholders, and maintain confidence in the UK as a global financial centre.
How we operate
Our strategic objective is to make sure relevant markets function well. We’ve outlined how we'll achieve this in our 3-year Strategy.
Our operational objectives are to:
- protect consumers from bad conduct
- protect the integrity of the UK financial system
- promote effective competition in the interests of consumers
Since 2023, we have a secondary objective to facilitate the international competitiveness and growth of the UK economy in the medium to long term (subject to alignment with international standards).
We're an independent public body funded entirely by the fees we charge regulated firms. Our role and objectives are primarily defined by the Financial Services and Markets Act 2000 (FSMA) and we’re accountable to the Treasury, which is responsible for the UK’s financial system, and to Parliament.
To advance our objectives, we work with the Prudential Regulation Authority (PRA), the prudential regulator of around 1,500 banks, building societies, credit unions, insurers and major investment firms. We also work alongside other regulators, UK organisations and government departments, and regularly engage with a wide range of international counterparts and stakeholders.
We have a large and growing remit and our annual perimeter report sets out what we do and don’t regulate.
We consider the principles of good regulation when carrying out our work. We also consider the importance of tackling financial crime, taking into account the nature, size and complexity of firms.
How we regulate
We work towards our objectives in a variety of ways.
- We make new rules and issue guidance and standards.
- We work to detect market-wide harm and put in place remedies through market studies.
- We authorise or register financial firms and individuals.
We use a proportionate, risk-based approach to regulation. We prioritise the areas and firms that pose a higher risk to our objectives, taking into account the size, complexity and potential impact on different types of consumers.
We’re also maximising the use of data and technology. This ensures our intelligence is better joined up, and we can move faster to identify and act against firms and individuals who are more likely to cause harm.
Authorisation and registration
Firms and individuals must be authorised or registered by us to carry out certain activities.
Before we grant authorisation, firms must demonstrate that they meet a range of requirements. We then supervise these firms to make sure they continue to meet our standards and rules after they’re authorised.
Our approach to supervision explains the approach we take in supervising different types of regulated activities. For example, harm manifests itself in different ways across retail and wholesale markets and we shape our priorities accordingly.
If firms and individuals fail to meet our standards, we have a range of enforcement powers we can use, including bringing criminal prosecutions to tackle financial crime.
How we measure our performance
Every year, we outline the actions we’ll take to achieve our objectives in our Business Plan and we describe the progress we’ve made in our Annual Report.
We also publish a list of multi-year outcomes and metrics that we use to measure progress and against which we hold ourselves accountable.
We measure our performance using operating service metrics (formerly known as service standards). We publish these as part of our commitment to being a transparent organisation.
We also publish quarterly authorisation operating service metrics to be transparent about our performance.
