An influential committee of MPs has called on the Financial Conduct Authority (FCA) to become a more agile and decisive regulatory body to protect consumers and financial markets better.
In a report responding to the FCA’s handling of the London Capital and Finance collapse, the Treasury committee wants the FCA to become more proactive and joined-up as a regulator, willing to act decisively to protect consumers.
It wants the FCA to establish an end date for this cultural transformation and milestones to measure culture changes, which should be published.
Mel Stride MP, chair of the Treasury committee, said:
“The collapse of LCF is one of the largest conduct regulatory failures in decades.
“Dame Elizabeth Gloster identified a litany of failings at the FCA regarding its regulation of LCF and highlighted a range of changes needed at the FCA under its new leadership.
“The Treasury committee has made some further recommendations for the regulator and the government to help prevent another LCF.”
Adviser trade body PIMFA has supported these calls for a cultural change at the regulator, welcoming the Treasury committee report as echoing many of the recommendations previously made by PIMFA.
Tim Fassam, director of government relations and policy at Pimfa, said:
“Our industry called on the FCA to act over London Capital and Finance repeatedly. A more agile, engaged and decisive regulator could have prevented the losses suffered by thousands of consumers as a result of what happened with LCF and it is encouraging that the current senior leadership of the FCA recognises this.
“But as the Treasury select committee says in its report, the FCA must set milestones for change to be achieved.”
Responding to the calls for a cultural change at the regulator, an FCA spokesperson said:
“We welcome the committee’s report and will be providing a formal response in due course. As we have said we are profoundly sorry for the mistakes we have made over LC&F and are committed to implementing the recommendations of The Gloster Report which are progressing at pace.
“The FCA has embarked on a wide ranging transformation programme to build a data-led regulator able to make fast and effective decisions and we are providing the Committee with updates on our progress.
“We agree with the recommendation that fraud via online advertising should be included in the Online Safety Bill, as online platforms are now the single biggest channel of financial scams and fraud.”