How does the FCA promote competition?

The Financial Conduct Authority (FCA) promotes competition within the financial services industry by ensuring equal opportunity for all regulated firms. This approach fosters an environment where a diverse range of financial service providers can operate on a level playing field, which ultimately benefits consumers through increased choices and better prices.

By ensuring that all firms have fair access to the market and are able to compete on their merits, the FCA helps facilitate an environment where innovation can thrive. This means that new entrants can challenge established players, and consumers are more likely to benefit from improved services and products. Encouraging competition is essential to the FCA's mission to protect consumers, enhance market integrity, and promote competition itself.

The other options do not align with the FCA's objectives. Approving only large financial firms or imposing restrictions on new entrants would create barriers to competition, contrary to the FCA's purpose. Regulating interest rates among financial firms could lead to price fixing, which undermines competition rather than promoting it.