The Financial Conduct Authority's chief executive has said Brexit is hindering the regulator's efforts to crack down on online infractions of its rules.
Andrew Bailey was appearing before the Treasury committee this morning (June 25) being asked about the FCA's regulation of London Capital & Finance, the mini-bond firm that went into administration earlier this year.
London Capital & Finance entered into administration at the end of January owing more than £230m, and putting the funds of some 14,000 bondholders at risk.
As a provider of unregulated investments London Capital & Finance did not need to be authorised by the FCA to issue mini-bonds, but it was authorised to promote the mini-bonds which MPs have claimed enabled the company to "raise money from bondholders by marketing themselves as FCA-regulated in their promotional literature."
Mr Bailey said internet marketing was a "big challenge" now for tracking down problematic products and services which were being offered online and that the FCA had an entire team dedicated to it.
Mr Bailey said: "We have done a lot of work to, frankly, get prepared for whatever [MPs] want to decide [on Brexit].
"The fact that it is now going on longer is having an effect on our ability to invest. We want to make a big investment in data analytics […] we are very conscious of the need to do that, we are very conscious, for instance, of the need to do advanced analytics on web scraping.
"And I am having to take hard decisions, the board is having to take hard decisions, about where we put our priorities at the moment. And obviously we are continuing to prepare for whatever you want to do on Brexit."
Shortly before the collapse of LCF the FCA had ordered the company to stop marketing its fixed-rate investment bonds and Isa products and the provider had its assets frozen by the regulator.
But critics said the regulator did not act quickly enough and had failed in its supervision of the firm, leading to calls for Mr Bailey to resign.
Charles Randell, the FCA's chairman, told the committee the existence of the Financial Services Compensation Scheme could act as a "subsidy" for investors putting their money into high risk investments.
He said: "A combination of the yield environment, the pension freedoms and a whole load of other things means that people are now in a position where they can take very high risk investments.
"Whether you think that's a good thing or not I suspect depends where you sit on the political spectrum in terms of the responsibility of the individual and the way capitalism works in our society."
Mr Randell added: "We have the most generous financial protection scheme of any country that I have come across. Most countries take the view that the financial protection scheme is largely to give people confidence in the banking system and all about protecting a minimum level of deposits.