The Financial Conduct Authority has admitted that its Financial Services Register is in need of “further improvements” to better protect consumers.
In a written response published today (November 16) to a question that was put to the watchdog at its annual public meeting last month, the FCA said work on the register is ongoing and it expects to have an update on plans for the register in 2023.
The response was made to an accusation that the register “is not fit for purpose” given concerns previously raised by the Financial Regulators Complaints Commissioner.
Earlier this year, the FCA refused to accept that the information provided on its register was misleading and gave investors caught up in a mini-bonds scandal the wrong impression of what they were investing in.
Its response today reiterated this, and said that while the FCA believes the register was not misleading in relation to the regulation of London Capital & Finance, it could have been clearer.
“We have already taken steps to address that,” the FCA said.
It continued: “We want to continue to improve. Our work will be ongoing and iterative. It may involve changing the technology we use. We are also mindful there may be different needs and solutions for different users and audiences, in particular consumers.”
The regulator also pointed out that the register “is a high-volume website” that receives over a million visitors a year, and more than 3,500 visitors on a typical working day.
“We have steadily increased our investment in the register and made a range of incremental changes. That includes improvements to the data and consumer protection messaging.
“Thousands of users provide feedback on the register each year, and about 85 per cent of that is positive. However, the comments we receive show the need for further improvement,” the FCA said.
Pimfa head of public affairs, Simon Harrington agreed that there remain particular areas where the register is not working as well as it could be.
“While it acts as an effective barrier to scams in most cases, it continues to be the case that the sale of unregulated products through the ‘halo effect’ of regulation is not adequately captured by the register,” Harrington said.
“There are high profile examples of the harm that the halo effect has introduced into financial markets previously and it remains a source of disappointment that the FCA has not sought to mitigate this through prominent warnings on its register.”
Since the mini-bonds scandal the FCA has taken a number of steps to make the register clearer.
This included a redesign with the addition of a banner to highlight to consumers that firms regulated by the FCA may carry out unregulated and regulated activities and that they should contact the Financial Ombudsman Service and the FSCS directly if they want details about the protection those organisations might offer them.