The future of the Financial Conduct Authority is set to be debated by MPs in the House of Commons next month.
Guto Bebb, the Conservative MP for Aberconwy, has tabled the motion “this House believes that the FCA in its current form is not fit for purpose and we have no confidence in its existing structure and procedures”.
It is supported by Treasury committee member and Labour MP John Mann and SNP MP and pensions spokesman Ian Blackford.
The debate will take place in the afternoon of 1 February, followed by a vote on the motion.
Topics are set to include the FCA’s handling of the Connaught fund - something Mr Bebb has raised in parliament several times - and the mis-selling of interest rate hedging products.
In May 2014, an All-Party Parliamentary Group looking into the collapsed Connaught funds held its first debate, raising questions over the sprawling and confusing nature of so-called ‘unregulated’ investments, as well as a perceived lack of transparency by the regulator itself.
That July, the FCA reached a ‘negotiated settlement’ which it said represented the best course of action for all parties.
However, by February 2015 Connaught settlement were still ongoing to see if an agreement could be reached to address investor losses, after regulatory work with its former operators Capita Financial Managers and Blue Gate Capital.
In terms of interest rate hedging, the regulator’s former chief executive Martin Wheatley was forced to defended its handling of mis-sold products last summer, stating it is now a matter for the courts to determine discrepancies between the FCA’s and the claimants’ view.
Around £2bn in compensation has so far been paid by banks to businesses who bought the products.
The parliamentary session comes after the Treasury Select Committee grilled FCA chairman John Griffith-Jones and acting chief executive Tracey McDermott over the regulator’s independence from government.
The FCA declined to comment.
Derek Bradley, founder and chief executive of Panacea Adviser, said that a lack of regulatory accountability ultimately impacts the consumer, as the higher regulatory costs of paying for failures are passed back to them to pay by all involved in the advice and product manufacture process.
“Regulation has turned into one of today’s few successful growth industries. It gives it’s workers unsackable career opportunities based upon civil service lines where jobs are not lost for failure, with no need to justify it’s existence, with no responsibility toward the parliament that gave it life or indeed anybody.”
Douglas Baillie, director of Perth-based financial advisers Douglas Baillie, commented that it is time to start over and engage directly with the adviser community to create new rules that are fair and clear.
“At the moment the IFA has to foot the very high costs of complying with the onerous FCA complaints management processes, and the legal costs of defending themselves, irrespective of the veracity of the so called ‘complaint’.