Financial Conduct Authority  

MPs call for inquiry into effectiveness of FCA

Last week (December 18), the Treasury Committee said it had plans to take further oval evidence on the findings of the investigation into the City watchdog's part in the LCF scandal. 

Mel Stride, chairman of the Treasury committee, said the report exposed a "litany of failings" at the FCA. 

He added: "We will look at the detail of this important report thoroughly and the committee plans to take oral evidence on it, as well as on any wider implications for the regulatory regime, in the new year."

HM Treasury first requested the independent investigation in May 2019 after the mini-bond provider collapsed owing more than £230m and putting the funds of some 14,000 bondholders at risk.

Following Dame Elizabeth's report the Treasury confirmed the government would set up a scheme to assess whether there is justification for further one-off compensation payments for investors.

FCA chairman Charles Randell said the FCA was "profoundly sorry" for the mistakes it had made and admitted there were a number of things which it could have done better in its supervision of the Connaught case.

An FCA spokesperson said: “The speed with which the FCA responded to the challenges of the coronavirus crisis proved how we can respond nimbly and decisively to a rapidly changing landscape.

“This followed years of positive changes we made to the landscape to improve consumer choice and outcomes, including reforming the mortgage market and strengthening consumer protection in the consumer credit market - particularly for users of high-cost credit and credit cards.

“We’ve also taken vital enforcement action and in the three years to April 2020 we imposed financial penalties totalling more than £520m.

“We have already learnt considerable lessons from what happened with LC&F and Connaught and we will show clearly how we are implementing the recommendations made to us.

“The transformation programme, which is currently underway and is now continuing under the leadership of Nikhil Rathi, who joined as chief executive in October, is the right way to bolster trust in the FCA and realise our ambitions for change.”

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