Wolters Kluwer weighs in on FCA
Great care is needed when deciding on the scope of the Financial Conduct Authority’s powers, Wolters Kluwer has warned.
Robert Ellsworth, regulatory editor of WKFS, said: “We must not stray to the extreme where firms are powerless to defend themselves on a reasonable and rational basis against a regulator that acts as judge and jury.”
His comments followed stark warnings by ministers and industry players over the FSA seeking greater constitutional powers for the FCA and to require firms to provide full redress for losses where only partial causation may be provable and/or contributory rule or other regulatory breaches may have taken place.
These were in the FSA’s submissions to the joint committee on the Draft Financial Services Bill.
He said: “If society expects as a matter of public policy the regulator should require greater levels of redress to be paid, then the FCA needs to be given powers to do so in the new legislation.
“This gives rise to questions as to how far the regulator’s powers should extend. We would welcome the committee debating this matter, in particular to achieve further clarity as to the FCA’s mandate in this area.”
Mr Ellsworth added: “Treating members of the financial services industry fairly, as opposed to its customers, also surely demands a fair and reasonable approach.
“No one wants a weak and ineffective regulator. It is only fair and reasonable great care must be taken over the mechanisms and powers encompassing the regulator’s enforcement activities.”
Bruce Jamieson, principal of Sussex-based Jamieson Financial Management, said: “Nobody should have no accountability and the FCA should not be given powers that allow it to overstep the mark. It may be tough on firms but what has it done about the banks?
“The US has seen more than 1000 prosecutions since the financial crisis - we have had none.”