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FCA's 'early intervention' drives drop in RDC referrals

FCA's 'early intervention' drives drop in RDC referrals

There has been a drop in cases referred to the Financial Conduct Authority's Regulatory Decisions Committee (RDC), which the watchdog credited to its “early intervention” work.

In the year to the end of March, 224 cases were referred to the RDR and 229 cases were completed in the period, down from 383 and 382 respectively in the previous year.

In the regulator’s 161-page report released today (July 15), Tim Parkes, chairman of the RDC, said the majority of cases in the past year have come through the FCA’s enforcement and market oversight division. 

He added the FCA expects to see the number of cases to remain at the current rate, with an increase of complex cases and a reduction in “straightforward enforcement cases”.

Parkes said: “This year we have continued to see a number of urgent supervisory matters, reflecting the FCA’s focus on ‘early intervention’ work to prevent or reduce harm to consumers at the earliest possible stage.

"In addition, the RDC determined a number of contested authorisation cases in relation to claims management firms with temporary permission.”

The RDC is a separate team from the rest of the FCA, and is responsible for the final decision-making on matters surrounding cancelling permissions and registrations, prohibitions, issuing financial penalties, and withdrawing approvals.

It issues decision notices and supervisory notices as well as prohibitions, fines and suspensions.

Cases in the past year ranged from allegations of serious misconduct to simpler cases where individuals had failed to pay fees due to the city watchdog.

Changes at the RDC

Parkes also referred to the ongoing internal view which is looking at the RDC’s part in the FCA’s decision-making process.

He said: “It seems likely that this [review] will result in some changes to the RDC’s current remit, although it is not yet clear precisely what these will be. I look forward to reporting on them in my report next year.”

The FCA is looking to streamline decision making on authorisation applications and specific supervisory and enforcement decisions, as described in its business plan for 2021/22 published this morning.

The regulator said it wants to prevent and stop harm faster, and one way to do so was making changes to areas within its control, including taking "greater risks" when making decisions. 

It said it will be consulting on changing the balance of decisions taken by the executive and the RDC so it can "intervene in real time".

It is also looking to make changes to its financial promotions regime and has put new procedures in place to fast-track its supervisory and enforcement responses so it can act faster when breaches occur.

The FCA said: “We will proactively monitor firms that repeatedly breach our rules and investigate where breaches indicate more serious issues. Further details about this are in our report, ‘Implementing the recommendations from the Independent Reviews’. 

“We will shortly consult on proposals to streamline decisions about authorisation and specific supervisory and enforcement actions. We propose to change the balance of decisions taken by the FCA Executive and our Regulatory Decisions Committee.