The City regulator has hired consultants to help fight the backlog in authorisations, while it recruits for new staff.
Speaking to the Treasury committee yesterday, Sheldon Mills, executive director, consumers and competition at the Financial Conduct Authority (FCA), said that the regulator always needs to prioritise enforcement and its gateway.
He said the regulator is working on overcoming operational challenges in authorisations by using consultants while recruiting new staff and is working “very closely” on maintaining a robust gateway.
This comes amid criticism of delays in authorisations.
Chief executive Nikhil Rathi has previously said the regulator is working hard to address this by hiring more staff and digitalising the approval process.
“We always need to have a sensible gateway and always need to have strong enforcement, you need to do both,” said Mills.
“We do have operational challenges at the moment in authorisations, I wouldn’t come to this committee and say otherwise, the facts speak for themselves, there are delays and challenges.
“We put in place measures to both recruit and also have some consultants in to help us while we are recruiting, to get through that backlog, but one of the issues we have is the gateways is really important so you have to keep the standards and ensure the standards are high and some of the challenges we’ve seen, there are links through to some of the harmful effects that happen for consumer markets and firms in terms of what we may have let through the gateway.
“So, it is important for us to have a robust gateway and sometimes in that transition of changing the approach of the gateway and the standards we have there we need to get the operational mix right, so the flow through happens a bit more efficiently but we’re working on that very closely.”
Mills defended his enforcement team for doing a “good job” of ensuring cases stand up in either the court or the FCA’s internal tribunals.
“On enforcement, I take the points and criticism about fraud and also take the points about pace, but I’m a lawyer by background and enforcement is not an easy thing to do,” he said.
“You have to make sure your case eventually is going to stand the test of either the court or our internal tribunals effectively and our enforcement team does a good job of doing that.
“I think where we need to think about in the future of financial services is where we focus on in terms of enforcement and how does it actually support us in achieving our outcomes in the financial services sector.
“I wonder if sometimes if we might be too broad in terms of our enforcement activity, and we could be more focused in relation to it and that might help in terms of being able to tell the story of our enforcement activity.”