Financial watchdog set to crack down on sector’s ‘problem firms’

THE FINANCIAL Conduct Authority (FCA) has announced a new strategy to shut down “problem firms” that do not meet basic regulatory standards.

Bosses at the regulator said they are concerned that the costof-living crisis could see households turn to lenders in greater numbers to manage their finances.

The three-year plan will see 80 new staff work to crack down faster on potential fraud and poor treatment of consumers.

They will also publish outcomes and performance targets to allow for greater accountability, the FCA added.

The regulator said: “A key focus of the strategy is shutting down problem firms, which do not meet basic regulatory standards.

“The FCA is recruiting 80 employees to work on the initiative, which will protect consumers from potential fraud, poor treatment and create a better market.”

The strategy builds on activities launched last July, when FCA boss Nikhil Rathi committed the regulator to become more innovative, assertive and adaptive.

He also vowed to transform the FCA into a data-led platform that can face the threats and opportunities of the future.

Mr Rathi added: ”Our new strategy enables the FCA to respond more quickly to the rapidly changing financial services sector.

“It will give us a foundation to continuously improve for the benefit of our stakeholders, and respond swiftly to economic and geopolitical developments.”

The watchdog has faced criticism in the past over its slow progress at cracking down on problem firms, including the London Capital & Finance minibond scheme.

It was heavily criticised following a report by MPs into the scandal that found the FCA did not act appropriately to protect investors.

The FCA is the conduct regulator for around 51,000 financial services firms and financial markets in the UK. It is an independent public body funded entirely by the fees it charges regulated firms. It is accountable to the Treasury, which is responsible for the UK’s financial system, and to Parliament.