British watchdog, the FCA will spend $166 million over three years to improve its data strategy and spread more staff across the UK to curb financial scams.
July 15, 2021, | AtoZ Markets – The UK’s Financial Conduct Authority (FCA) has outlined plans to overhaul its practices and vowed to be faster at spotting fraud and poor behavior by banks.
The city watchdog said on Thursday it will invest £120 million ($166 million) in improving its data capabilities over the next three years to crack down on financial scams and misconduct.
These include strengthening rules on financial promotions to protect investors, improve standards on pension advice, and taking a more proactive approach to identifying scams and high-risk investments.
The plans come less than a month after MPs on the Treasury Select Committee said the FCA needed a culture change following the collapse of mini-bond firm London Capital & Finance (LCF).
LCF went bankrupt in 2019 after raising £237 million ($328 million) from 11,000 small investors and a report by Dame Elizabeth Gloster last December found the FCA failed to properly regulate and supervise the business.
She urged the FCA to focus on improving internal authorization and supervision processes.
The FCA apparently accepted the report and said it would be “proactive at the boundaries of the perimeter” of its regulated markets – having previously pointed out the LCF model did not fall under its remit.
The regulator also said it would develop new plans to differentiate the UK’s financial institutions from EU ones following the recent revelation from Chancellor Rishi Sunak that attempts to sign a mutual recognition deal with Brussels had failed.
Other areas of focus also include cost-cutting by working with partners to drive down fraud, improving diversity and inclusion in the banking sector and finding ways to work towards net-zero carbon emissions targets.
A review has also been launched into the rules and scope of how many people would be entitled to payouts under the Financial Services Compensation Scheme for certain regulated activities when they go bust.
“The FCA must continue to become a forward-looking, proactive regulator. One that is tough, assertive, confident, decisive, agile,” former finance ministry official Nikhil Rathi said.
“One that acts, acts fast — and where we can’t act, engages enthusiastically with those who can.”
He added: “Over the next 18 months you will continue to see an FCA that looks and feels even more different. One that operates differently, partners differently, and communicates differently. One that delivers market integrity and delivers for the consumers that we serve. One that is not only purposeful but that is fit for purpose.”
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