FCA vows to take tough action for breaking rules

A 50-page paper, The FCA’s Approach to Advancing its Objectives, outlined how it will hold more individuals, particularly senior managers, to account for infringement of regulations. The regulator will also prioritise compensation for consumers.

The report stated: “We have a low tolerance of poor conduct towards consumers and follow a strategy of credible deterrence, taking tough and meaningful action against the firms and individuals who break our rules as well as those who carry out illegal unauthorised business.

“This is supported by a range of regulatory powers, including both civil and criminal prosecution, to enforce our rules.”

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The FCA indicated it may issue statements of principle on the conduct of approved persons which would then trigger the publication of a code of practice.

In the document the City watchdog said that it will scrutinise why potential consumers “do not buy certain financial products” as part of an overall watching brief on market features that “inhibit or distort” competition.

It said that low take-up could be the result of poor awareness and understanding among consumers, but added that unsuitable products or “unnecessary, anti-competitive restrictions” could also be to blame.

The regulator said it intended to examine whether existing regulation undermined competition and whether firms faced too many barriers to enter the financial services industry .


- The regulator aims to ensure it does not “stifle innovation and competition” in the effort to maintain standards

- There should be more detailed processes for appointing senior managers to make sure they are held accountable for breaching rules

- More enforcement cases and tougher penalties will be brought against individuals

Adviser view
Colin Low, director of Essex-based Kingsfleet Wealth, said: “I’m pleased that the FCA has said it will prioritise compensation for consumers, but what I’d like to really see is a range of approved investment solutions and products, with some sort of FCA kitemark. Advisers don’t have the resources to check on every aspect of every product to see what’s lurking in the background so the regulator must use its resources to check that products have sufficient financial backing.”