The Financial Conduct Authority (FCA) has warned regulated firms that it is not afraid to remove their authorisations if it feels their permissions are being misused.
Speaking at the City Week forum today (22 June), FCA chief executive Nikhil Rathi (pictured), revealed the FCA’s approach to regulation post-Brexit and how it is responding to new financial products such as cryptocurrencies.
Rathi revealed that there are 1,450 European Economic Area (EEA) firms currently using temporary permissions to access the UK markets.
“As we move to a more permanent arrangement, there will be a rigorous review of all firms seeking to enter the UK authorisation gateway,” he said.
“Our priority is to ensure consumers are not disadvantaged in any way. That’s why firms that have the potential to grow quickly and may pose a greater risk of harm have been told to apply for authorisation sooner.”
Since the end of the transition period earlier this year, Rathi revealed, the FCA has taken action against 13 firms, restricting their business, and is taking steps to remove a further 120 firms.
He also cited the FCA’s approach to cryptoassets, highlighting requirements for firms to register with it under anti-money laundering rules.
“We have identified 111 firms operating without registration,” he added.
“They are listed on our website and we will take further action where appropriate. We want to support innovation and believe we can do so whilst maintaining rigorous standards on anti-money laundering controls.”
He warned that the FCA will act quickly to remove permissions of firms it supervises.
“Our robust approach continues in our supervision of firms,” he said.
“If, once we do authorise a firm, we see they are not using their authorisation or indeed misusing it, we are not afraid to act quickly to remove their permissions.
“They will have to ‘use it or lose it’. We also anticipate in more cases, where there are significant risks, that we will need to supervise overseas firms, accessing the UK market more directly to make sure they meet our standards.”
The FCA has been criticised for previously not spotting that its financial register incorrectly showed peer-to-peer lender Collateral had interim permissions ahead of its eventual collapse.