The UK’s financial watchdog has announced reform plans as it faces criticism over repeated failures to protect customers.
In a statement released today the FCA said it will give additional powers to senior managers, who will be able to start criminal proceedings and civil actions as part of an overhaul aimed at simplifying the way decisions are taken by the City regulator.
Nikhil Rathi, 42, who took over as head of the FCA last year, wants to get the watchdog back on track after it was criticised for being too slow to take decisions and protect consumers in a string of high profile cases.
Emily Shepperd, Executive Director of Authorisations, said: “we are taking a fresh approach to tackling firms and individuals who do not meet the required standards. Our new streamlined decision-making process will allow us to be more assertive in stopping harm.”
The FCA has faced criticism for failing to protect savers who lost a total of £237m in the collapse of investment firm London Capital & Finance in 2019.
A damning independent report into the FCA’s role in the controversy, which was released last December and compiled by a former Court of Appeal judge, criticised the watchdog for failing to spot a series of red flags and properly scrutinise the company.
The Financial Regulators Complaints’ Commissioner recently launched an investigation into the FCA for subsequently changing the rules of its compensation scheme to avoid making payouts to the victims.
The City regulator also came under fire for its supervision of Neil Woodford’s £3.7 billion Equity Income fund, which fell apart in June 2019 in a scandal that impacted hundreds of thousands of small investors.
Going forwards, senior managers will be responsible for authorising firms and individuals, cancelling or limiting a firm’s permissions, using FCA powers to impose requirements on a firm and starting legal proceedings. The FCA’s regulatory decisions committee, which has previously been responsible for taking action against firms, will continue to review more contentious decisions.