Speaking in the House of Commons, Smith said he was glad to see the recent introduction of the bill but said it should give the FCA more powers "to deal with pension sharks".
Smith said. “The Financial Conduct Authority needs to look across our country, as well as the City of London, therefore can I ask the minister to make doubly sure that this bill has the strongest possible provisions for consumers and that the regulatory culture at the FCA is fit for purpose.”
Smith, who is MP for Bleanau Gwent in south Wales where many have been affected by the British Steel Pension Scheme scandal, argued “much more” needed to be done.
“Unfortunately, I've lost confidence in the main regulator, the FCA,” he said. “Their oversight of the British Steel Pension scandal was plain hopeless.
“I saw the stress and grief of steelworker pensioner constituents who had been ripped off and my own experience as a member of the public accounts committee chair has shown how useless the FCA can be.”
They failed to regulate a marketplace rigged against the steelworkers.Nick Smith, MP for Blaenau Gwent
The Labour MP added: “A recent public accounts committee report found that the FCA failed to protect BSPS members from unscrupulous financial advisors who were financially incentivised to provide unsuitable advice and the regulator was “behind the curve in its response”.
The financial services and markets bill was announced during the Queen's Speech earlier this year and was introduced to parliament in July.
It aims to revoke EU financial services regulations and replace them with new rules which are "designed for the UK". It will also introduce additional protections for those investing or using financial products, to make it safer and support the victims of scams.
Controversial “call-in” powers, which would allow the government to intervene in financial regulation in the interest of the public, were not included in the bill and are said to be under consideration.
Smith said HM Treasury should have increased powers to direct the FCA to make, review and enforce new rules as and when the need arises, saying it “does need to jump in when necessary”.
“We need a fit-for-purpose FCA that robustly defends its consumers at the outset,” he added. “It needs to hold bad actors to account from the get go.
“Therefore, [...] I believe that consumer protection should be embedded much better in chapter three of the bill as a key accountability of the regulator.
“That is why I hope to see amendments to this bill that mandate a much sharper focus on consumer protection, with statutory panels that centre on the consumer.”
In July, a report into the handling of the BSPS saga by the public accounts committee looked at how the regulator handled the issue, the proposed redress scheme and how prepared the FCA is for future risks.
