The Financial Conduct Authority (FCA) is escaping scrutiny for the time being, as investors are forced to wait for the City regulator to finish its own investigations before they receive answers to their complaints.
It comes as the FCA has been criticised for its regulatory oversight involving the collapse of peer-to-peer lending platforms such as Collateral and Lendy and mini-bond provider London Capital & Finance (LCF).
The Financial Regulators Complaints Commissioner (FRCC), which investigates complaints against organisations including the FCA, has published two similar reports, each about a separate complaint about the FCA in which the complainant has suffered from financial loss from an unnamed firm.
In both cases the FCA deferred its investigation into the complainant’s concerns “for a period of time” because the complaint is connected with, or arises from, “ongoing regulatory action” by the City watchdog and there is a risk that if the complaint is investigated at the same time, it could “adversely impact that action”.
And in both cases, the FCA said it will update the complainant every six months or earlier if ongoing regulatory action concludes before this time, and the FRCC upheld the FCA’s deferral.
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“The FCA is correct to say that, under paragraph 3.7 of the Complaints Scheme, investigations of complaints can be deferred where there is continuing regulatory action which might be undermined by the consideration of the complaint,” the FRCC said in its final reports in both cases.
“I agree with the FCA’s decision to defer your and other complaints about this matter for the moment, as it is likely that the regulatory action will produce material which is relevant to your complaint.
“I also think it would be unhelpful if the FCA complaints team were to undertake an investigation into these matters in parallel with the regulatory investigation. I am pleased to note the FCA will be keeping you updated every six months.
“I realise that this continuing delay is likely to be frustrating for you, but I hope you will understand that, in my view, it is the best means to ensure that your complaint is thoroughly considered at the most appropriate time.
“I note from your comments on my preliminary report you are disappointed with my analysis, however I am pleased you understand the reasoning for my decision and the fact I cannot uphold your complaint.”