FCA pledges greater transparency in response to IRHP review

It said the FCA should aim to ensure that persons within the same category are treated consistently and where rules exist for the protection of all, regulatory intervention should not be restricted to benefit only part. 

The FCA should also ensure its rules are sufficiently clear and “detailed to permit effective compliance”. 

Other recommendations included the decision-making function to approve voluntary redress agreements should be reserved to the FCA's senior leadership and before entering into a voluntary agreement the regulator should consider formalising the agreement. 

The report said: “To the greatest extent possible, redress schemes should be simple, clear and easy to implement, to ensure rapid and consistent results. 

“Any redress scheme should be designed to avoid unnecessary complexity so that those implementing the scheme, and its beneficiaries, are able to readily understand its terms and conditions and that the scheme can operate quickly and easily.”

In future redress schemes, the FCA should strengthen the oversight role of the skilled persons, and future schemes should include an independent appeal element allowing beneficiaries to challenge outcomes with which they disagree.

The recommendations also stated the FCA should commit to greater transparency in the exercise of its powers and its policies, maintain a detailed, comprehensive and reasoned audit trail in relation to its decisions and improve processes for engaging its board.

Whether using skilled persons or not, the FCA should ensure future schemes are designed so that it retains sufficient control over any intervention and remains accountable in public law for the results of the exercise of its jurisdiction. 

Charles Randell, chairman of the FCA, said: “I would like to thank John Swift QC for his thorough and thoughtful review. The FCA today is a very different organisation from the FSA as it existed when these products were sold and when it established the redress scheme. We would expect to act far sooner and more decisively today.

“We are transforming the FCA into a more innovative, adaptive and assertive regulator that is fit for the future. Mr Swift has made helpful recommendations that will strengthen our regulation, our supervision of firms and our approach to redress.”

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