- Thursday, April 25, 2024
By: Shilpa Sharma
THE Financial Conduct Authority (FCA) is planning to take a more aggressive approach to tackle wrongdoing, The Times reported.
The UK’s financial regulatory body will spend £120 million over the next three years to boost its ability to collect and analyse data, enabling it to tackle misconduct by firms and individuals more quickly, the watchdog’s chief executive Nikhil Rathi said.
The authority pledged to take a more proactive approach towards policing the area under its purview.
It faced criticism after the publication of an independent report in December about its mishandling of the £237m London Capital & Finance (LCF) investment scandal, which censured the regulator for taking an “unduly limited” approach to its boundary.
Though LCF was a regulated business, its sale of mini-bonds to more than 11,600 small investors was not. Therefore, the company’s collapse in January 2019 exposed the FCA’s shortcomings.
Rathi, 41, who became the FCA chief executive in October, is seeking to overhaul the watchdog.
He said the FCA must become a “forward-looking, proactive regulator” that is “tough, assertive, confident, decisive, agile”.
“We know that there are areas where we need to raise our game considerably and prove we are a learning organisation,” he admitted, adding that becoming more assertive would mean “testing the limits of our powers and supporting others to bring their powers to bear.”
He further said the regulatory perimeter was a “perennial challenge” but that the regulator would not “turn a blind eye” to areas where its powers did not reach.
In areas that our outside the purview of the FCA, the regulator will use insight to stop and punish the suspect activity through its partner agencies, he said.
The authority, based in London, is exploring a plan to set up an office in Leeds with a staff of hundred employees. It is also aiming to double its headcount in Edinburgh to two hundred. Offices in Cardiff and Belfast will follow in the next two years.
Meanwhile, Simon Morris, a partner focused on the financial services at the law firm CMS, said the FCA’s annual plan suggested a revival of a “shoot first, think second approach.”
“Reckless use (of power) will destroy both businesses and customer service,” Morris said.
