In reference to the report into the FCA management (FA, 21 January), there are several key issues which initially spring to mind.
The FCA needs to be independent from government for its day-to-day work. This is not the same as being unaccountable, and there should be proper oversight by an elected government body on matters of policy and on key issues, such as dropping the review into banks.
The government body would need to be strengthened somewhat in its competence and have the appropriate powers to call the FCA to account.
The FCA and the then-FSA have traditionally had a regulator at its head rather than an experienced business person. This explains the ramshackle way it has been run in the past as evidenced by the lack of control over the closed book review. This is not to say there should not be a senior regulator involved in some way in the top management, but the experience required to be a regulator does not provide the appropriate skillset for running a large organisation.
Finally, the purpose of the regulator needs to be properly defined. The FCA has grown uncontrollably over the years and has taken on more and more responsibility, and as a result has lost its way.
An imperfect analogy would be with the legal profession. Judges have to apply the Rule of Law to their decisions and the law is set by Parliament. There are also others who intervene in the process such as the police and the Crown Prosecution Service. The FCA seems to be a standalone rule-maker, judge, jury and sole arbiter on whether advisers are fit and proper. The FCA also seems to have the power to subvert Parliament, as evidenced by the supplementary rules relating to the Pension Freedoms that they unilaterally produced.
Alan Kendrick
IFA,
Oakwood,
Peterborough
