Regarding the REGULATION OF THE UK, there are four major points to know
First, the UK's FCA regulation is divided into three levels. Investors should not think that the platform has a UK FCA regulatory number to mean that it is regulated by the UK, and rest easy. Among these three levels, it must be the highest level of supervision to be effective.
How does it work? There are two main points to be had:
1. The authorization status cannot be EEA authorization!
2, Able to hold clients money, FCA official website query out of the results, this must have!
Second, to open an account supervised by the United Kingdom, the account opening procedures and deposits and withdrawals are much stricter, and there are many troubles, but the funds are also much safer.
Third, platforms regulated by the formal FCA have the UK Financial Services Compensation Scheme, which can be compensated by up to £50,000 from UK regulators in the event of a failure. For example, investors were compensated in the bankruptcy of the Afrish Franc. The compensation scheme is effective for global clients and is protected for Chinese investors.
Fourth, when opening a foreign exchange account, one thing to pay special attention to is that it depends on whether your account is opened under the UK supervision. Many Forex platforms have multiple subsidiaries, and different subsidiaries are regulated by different countries. If you own a company in Australia or New Zealand, you will not be regulated by the UK FCA and will not be able to obtain the UK's financial services compensation protection!
Because the UK regulation has a strong credibility, major foreign exchange trading platforms have applied for UK supervision, as a highlight of the vigorous publicity, investors also prefer platforms with FCA regulatory qualifications.
The past and present lives of the UK regulator
Let's go back in time to 1985. At that time, Britain was ruled by Margaret Thatcher, the Iron Lady (she served as Prime Minister from 1979 to 1990, the longest prime minister in more than a hundred years). In 1985, the United Kingdom established the Securities and Investments Commission, abbreviated SIB, note that it is not SB. The SIB regulates the securities investment industry.
Margaret Thatcher introduced a policy called liberalizing the financial services industry, abolishing financial regulations and promoting mixed operations. That is, banks can engage in securities business and can integrate with investment banks. Everything is let go, everyone is playing, this is the era of the big bang in the British financial industry.
After Blair came to power in 1997, he really couldn't look at the freedom of the British financial industry and thought that it would be an accident. The new official took office three times, and in order to establish some political achievements for himself, Blair reorganized the one called the SIB, established a new agency, the British Financial Services Authority (FSA), and transferred the functions of supervising the banking industry that originally belonged to the Bank of England to the FSA.
From 1997 to 2012, the UK's financial regulatory system was coordinated by the UK Treasury, and the Bank of England and the FSA were specific officers. Of course, as the central bank, the Bank of England has the sole power, and its position naturally goes without saying, and monetary policy and financial stability are under its control.
The FSA is positioned, equivalent to the mainland's three associations (CSRC, Insurance Regulatory Commission, and Banking Regulatory Commission), responsible for regulating banking, insurance and investment businesses, including securities and futures.
In 2008, the global financial crisis struck the UK hard. The United Kingdom has made a review and believes that the tripartite regulatory system of the Bank of England, the Financial Services Agency FSA and the Treasury Department is an important reason for the setback of British finance.
As a result of this reflection, the UK introduced the Financial Services Act 2012, which once again enabled it to achieve major innovations in financial regulatory reform, starting with the UK's repeal of the FSA, the FSA established during the Blair era, splitting the FSA into two and creating two new institutions: FCA and PRA.
The full name of the FCA is the Conduct Authority, and the full name of the PRA is the Prudential Regulation Authority.
The duty of the FCA Behavior Supervision Bureau is to knock you twice when you engage in small actions in private to harm the interests of investors, so that you feel pain;
The duty of the PRA Prudential Supervision Bureau is to warn you in advance if you feel that you may have small actions, so that you dare not play small actions.
This is the origin of the history of FCA regulation in the UK that we are currently familiar with. The FCA inherited the regulatory responsibilities of the previous FSA and was more stringent than the previous FSA.
The routine of the evolution of British financial regulation, in monetary economics, is called the British Bimodal Regulatory Model. In doing so, the UK is actually learning the idea of Australian regulation. Australia played the Twin Peaks regulatory set of things earlier, probably in 1998.
In the UK, it seems that there needs to be FSA regulation, isn't it? Because the scope of FSA supervision is very large, the banking and insurance investment business is grasped, such as insurance companies, it will also have an FSA regulatory number. But if you open an insurance company in the UK, it does not mean that you can do the business of foreign exchange margin.