The adviser trade body has welcomed the Treasury select committee's report urging for a change in culture at the Financial Conduct Authority.
The report, published today (June 25), labelled the FCA’s handling of London Capital and Finance as “one of the largest conduct regulatory failures in decades”.
It called on the FCA to implement a change in culture to protect consumers and financial markets.
But it said it supported the views of the current FCA leadership that the organisation needs to become a more “proactive”, “agile”, “decisive”, and a joined-up regulator that is willing to act to protect consumers and financial markets.
It said the FCA board should set itself an end date for the transformation programme and create milestones at which changes in culture can be reviewed.
Tim Fassam, director of government relations and policy at Pimfa, said he welcomed the report which echoed many of the recommendations Pimfa had previously made.
He said: “Our industry called on the FCA to act over London Capital and Finance repeatedly. A more agile, engaged and decisive regulator could have prevented the losses suffered by thousands of consumers as a result of what happened with LCF and it is encouraging that the current senior leadership of the FCA recognises this.
“But as the Treasury select committee says in its report, the FCA must set milestones for change to be achieved.”
In the report, MPs argued there was an “over-reliance on collective responsibility” at the regulator which might "deny visible accountability".
They said: "It is not readily justifiable for the FCA to require the firms that it regulates to adhere to the principles of the Senior Managers Regime but seemingly not to apply similar principles internally when there are failings of practice and culture in the organisation.
"There are doubts as to whether the FCA board has met the standards which it seeks to impose on others.
"An over-reliance on collective responsibility may deny visible accountability and could lessen confidence in the organisation as a result."
An FCA spokesperson said: “We welcome the committee’s report and will be providing a formal response in due course. As we have said we are profoundly sorry for the mistakes we have made over LC&F and are committed to implementing the recommendations of The Gloster Report which are progressing at pace.
"The FCA has embarked on a wide ranging transformation programme to build a data-led regulator able to make fast and effective decisions and we are providing the Committee with updates on our progress.
“We agree with the recommendation that fraud via online advertising should be included in the Online Safety Bill, as online platforms are now the single biggest channel of financial scams and fraud.”
The MPs said it was “disappointing” that measures to address fraud via online advertising have not been included in the draft Online Safety Bill.