The Financial Conduct Authority (FCA) has outlined its progress in implementing recommendations from the Gloster Report into the regulation of London Capital & Finance (LCF).
In an update released today (15 July), the FCA said that between the period of October 2020 to June 2021 it transferred 382 calls to the Financial Services Compensation Scheme (FSCS) after establishing a process to enable staff to directly transfer calls to the FSCS.
In the year to March 2021, one in six firms which applied to the FCA for authorisation were refused, rejected or withdrew their application after engagement with the FCA’s authorisations division. The regulator said it has trained 2,600 frontline supervision, authorisations and enforcement staff in various areas.
The FCA has used its ‘use it or lose it’ programme to identify and take action to remove permissions for regulated activities that are not being actively used where it considers the out-of-date permissions may cause harm to consumers.
Some firms have already applied to remove or change their permissions and by mid-July the FCA will have started contacting its next cohort as well as analysing responses from the pilot scheme.
The FCA has updated the criteria for its warning list to alert consumers to potential fraud and it saw an increase in consumer alerts from 573 in 2019 to 1,184 in 2020 and 808 so far this year. In the year to March 2021, it opened over 1,700 supervisory cases involving scams or higher risk investments.
The regulator said it has trained 3,629 staff on financial crime and fraud and rolled out a financial analysis knowledge check which will be completed by the end of July.
The FCA has implemented new policies, processes and procedures to tackle repeat breaches by firms of the financial promotion rules.
“We have established a programme of work that brings together all of the actions we are taking to implement the recommendations from the independent reviews,” the FCA said.
“There is a significant amount of work underway and our objective is to complete the majority of actions by the end of this year. Some actions are reasonably straightforward to implement; others will take time in order to have a sustainable and enduring impact.
“So, we have had to decide priorities for the actions required to address the recommendations and lessons identified.”
The FCA has also permanently banned the marketing of speculative illiquid securities, including speculative mini-bonds to consumers, and of crypto-derivatives to retail consumers, and it has published a discussion paper on strengthening financial promotions for high-risk investments.
In late 2020, Dame Elizabeth Gloster published her report of the independent investigation into the FCA’s regulation of LCF following the investment platform entering into administration in January 2019.