Operating a financial services business in the UK without the required authorisation from the Financial Conduct Authority (FCA) is a serious breach of regulations. Here are the potential consequences if you provide services that should be regulated by the FCA but are not:
Legal Penalties: Engaging in regulated activities without authorisation is a criminal offence under the Financial Services and Markets Act 2000. You could face prosecution, which might result in a fine or imprisonment.
Cease and Desist Orders: The FCA can issue a cease and desist order to stop you from continuing the unauthorised activity. This can also include the freezing of assets to prevent further operation.
Civil Sanctions: Individuals harmed by your unauthorised activities may seek compensation through civil proceedings. The FCA itself may also take civil action to seek restitution on behalf of affected consumers.
Reputational Damage: Being subject to regulatory enforcement can severely damage your professional reputation, affecting your ability to conduct future business or gain employment in regulated sectors.
Disqualification: The FCA has the authority to disqualify individuals from holding key positions in regulated firms if they are found to have been involved in unauthorised activities.
Market Withdrawal: Products or services you have offered may need to be withdrawn from the market, potentially leading to significant financial loss and disruption to your business operations.
Enforcement Notices and Publicity: The FCA may publish details of enforcement actions, which could alert current and potential future clients to the unauthorised status of your services.
It's crucial to seek the necessary authorisations and comply with FCA regulations before offering any services that fall under its jurisdiction. Doing so not only avoids these severe penalties but also ensures that you are operating within the legal framework designed to protect consumers and maintain market integrity.