Financial Conduct Authority  

Connaught review invites views on FCA

Connaught review invites views on FCA

Investors have been asked what they believe the regulator could have done differently in its handling of the Connaught Income Fund Series 1 as part of the independent investigation into the fund's collapse. 

The fund was an unregulated collective investment scheme run by operators Capita Financial Managers and Blue Gate Capital from March 2008, providing short term bridging finance to commercial operators in the UK property market.

The fund went into liquidation in December 2012, with investors losing £118m in the process.

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Earlier this year the Financial Conduct Authority commissioned barrister Raj Parker to lead an independent review into its own actions and those of its predecessor the Financial Services Authority in dealing with the fund and its operators between February 2007 and March 2015.

The review is intended to assess the "proportionality, appropriateness and effectiveness" of their regulation.

In an update on its website yesterday (October 15) the FCA said Mr Parker was now calling for those affected by the fund's demise to get in touch with what they consider the FCA and the FSA could have done differently. 

Mr Parker said: "Responses should be limited to the matters which fall within the scope of the review, as set out at paragraph 4 of the terms of reference, and it would be of great assistance to me if each part of any response could identify the issue(s) in the terms of reference to which they relate.

"It would also be of assistance if affected individuals could identify what they consider the FSA/FCA could have done differently with regard to the matters set out in paragraph 4, and whether the FSA/FCA has adopted any lessons learned to date."

The Complaints Commissioner first recommended the independent review in December 2016, with the FCA pointing last year to ongoing investigations into the Connaught fund as the cause of its long delay. 

The review will also address whether the FSA effectively managed any potential conflicts of interests within the regulator and assess its interaction with whistleblowers and any action taken as a result. 

But employees at the Financial Conduct Authority will not be obliged to meet with the leader of the review, with the regulator confirming in August its staff are not required under statutory powers to meet with Mr Parker. 

Instead the watchdog said it would "endeavour to secure the attendance at a meeting of any identified individuals who are current or former employees of the FCA". 

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