UK Financial Conduct Authority Tops Up in Its Regulatory Requests

November 27, 2018 | AtoZ MarketsThe UK Financial Conduct Authority (FCA) has added more requests to its regulatory provisions’ circle, requesting brokers to provide reports on how the new restrictions ESMA lately imposed, affected their businesses.

According to analysts, the new move might implies that the FCA has started reviewing the financial sector, in which it plays the guardian on some 58,000 financial service firms, just over three months since the introduction of the new EU regulatory framework.

In its notice, the FCA requested UK-based firms to provide data sets related to the introduction of the new leverage cap. The data, as the FCA states, must provide details about the impact of the new ESMA restrictions on brokers. ESMA, as an independent EU Authority, contributes to safeguarding the stability of the European Union’s financial system by enhancing the protection of investors and promoting stable and orderly financial markets. The main goal of the data request and review, as the FCA and European regulators state, is protecting the consumer.

What kind of data was requested

According to the media, the targeted firms received 46 basic questions. Those include data on several areas of a broker’s business, client numbers and the value of total client funds. Total volumes, trades, exposure and a breakdown on professional vs retail clients are also in the list of the information the FCA requested.

Among the other details the British regulator requested, are the nominal total profits of both professional and retail clients. The data in question focused on firms with active clients which were active between 2017 and 2018, with the three post-ESMA months in focus (August, September, October).

The regulator requested as well statistics on companies ranging between those that are making high profits, and those close to bankruptcy walls.

All of the data which retail brokers are to submit to the FCA should include “a breakdown of professional vs retail clients”.

Analysts read as well that the new restrictions set the FCA has added to its regulations might trigger a similar trend in the EU to be taken by its counterparts.

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