There should be more consumer representatives on the Financial Conduct Authority’s committee charged with taking certain enforcement decisions, according to its new chairman.
The regulatory decisions committee is tasked with issuing supervisory notices, warning notices and decisions notices on behalf of the FCA in certain instances.
Its new chairman and a former lawyer Tim Parkes, was asked to look into issues including its membership, by the Treasury Select Committee when he gave evidence to it earlier this year.
The results of this review have now been published and Mr Parkes has suggested some changed to the membership, including appointing more lay members and consumer representatives.
He said appointing practitioners with experience of consumer issues would “reflect the importance of consumers to the FCA”.
Mr Parkes added: “While specialist knowledge and experience are very helpful on the RDC, ultimately what is most important is that the individual members have the skills and attitude of mind required to make good quality decisions.
“Whilst I agree that the RDC needs to maintain a strong, overall balance of particular backgrounds and areas of expertise, in my view there remains room for lay members from outside the financial services industry, who have both those skills and attitude.”
Mr Parkes became chairman of the RDC at the beginning of the year and joined the committee along with former Aifa director general Chris Cummings.
He had also been asked to review whether the RDC was demonstrably independent of the FCA, something which he was confident of, although he felt there was a need to raise the RDC’s profile in order to increase public confidence in it.
Andrew Tyrie, chairman of the Treasury Select Committee, responded that decisions made by the RDC must be taken on their merits.
“So the committee needs to be independent from the FCA, and demonstrably so. This is all the more important if enforcement is to become a credible last line of defence in regulatory armoury,” he stated.
“The Treasury should commission an independent review of how enforcement is undertaken at the regulators, as previously recommended by the committee. The appropriate structure for the RDC should form part of this review.”
