View more on these topics

FCA to instigate court action over abuse of power claims

The FCA is embroiled in a dispute with a firm over whether the regulator abused its power under the conditions of the Financial Services and Markets Act and is in the process of preparing to take the issue to court.

Commissioner Anthony Townsend says the FCA has commenced proceedings against a firm accusing it of failure to comply with the FSMA.

A report shows the FCA requested the complainant firm provide information about a separate firm.

The firm did not agree to the request after calculating the amount it would cost to retrieve the information totaled £6,745.

The FCA said it would not meet the costs for the firm.

Complaints Commissioner sides with FCA over late fees charge

The firm reported a letter it received last October from the FCA to the Complaints Commissioner identifying “bullying, threats and abuse of power” after refusing to provide the information.

Townsend says: “The FCA will not pay a fee of £6,745 for your firm to provide the required information. You believe the FCA’s refusal to reimburse your reasonable costs amounts to a reasonable excuse under the terms of FSMA to justify you in not complying.”

The FCA says its interpretation of s3.6 of FSMA is regulators will not investigate a complaint which they reasonably consider could have been, or would be, more appropriately dealt with in another way. It states this rule applies to the situation.

Townsend says: “The FCA’s interpretation of this is that the FCA can appoint someone (for example a member of staff) to require information from your firm.

FCA investigations continue into collapsed Sipp advice firm

“It also believes that there is no obligation on the FCA to meet any costs for your firm to provide the required information.”

Interpretations of legislation remain at the sole discretion of a court and are therefore unable to be reconciled by the Complaints Commissioner, Townsend adds.

The complainant firm also says the FCA did not respond to its calls for a review into its policy of not reimbursing firms for reasonable costs, which contravenes s3 of FSMA.

Section 3 requires the FCA apply the principle that: “A burden or restriction which is imposed on a person, or on the carrying on of an activity, should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction; and the need to use the resources of each regulator in the most efficient and economic way.”

Townsend says: “The FCA wrote to you (the firm) on 19 October 2018 with an information requirement which superseded the information requirement sent to you in April 2018, and said that if you did not comply with the request for information by 15 November 2018, it would prepare papers to commence proceedings under s177 of FSMA.

FCA under fire for failing to track consumer outcomes

“That same day the FCA Complaints Team wrote to you to say that it was deferring investigation into your complaint because of continuing action by the regulator.”

The FCA’s decision to defer investigation is correct given the possibility of court action remains, Townsend adds.

The complainant firm can renew its complaint with the FCA if no court proceedings materialise.

Towsend says: “Any ruling by the court will also help inform the question of whether or not the FCA policy needs changing.”

Recommended

General-Business-People-Hire-Appointment-700x450.jpg

Financial planner poaches Standard Life Aberdeen operations manager

Boutique wealth management and advice firm Capital Asset Management has poached Aberdeen Standard Capital client operations manager Chirine Harb. Harb will join the firm as head of operations after leaving her role at Standard Life Aberdeen’s discretionary investment management arm. Prior to that role, Harb worked at Octopus Investments. Harb says: “The decision to move […]

London Thames

Blackrock brand holds top spot across European asset managers

Blackrock has been named most attractive brand among European asset manager firms, according to the annual report Fund Brand 50. The study, by corporate services company Broadridge Financial Services, monitors the influence of brand on third-party fund selection. Fund Brand 50 is based on intensive interviews with nearly 900 of Europe’s most significant fund selectors, […]

Ros Altmann
4

Ros Altmann: Without advice Lifetime Isa savers face clear risks

Since it was first proposed, it has been clear to many that the Lifetime Isa is unsafe to sell without advice. Significant dangers arise from the product’s complex design, absence of clear risk warnings, lack of suitability checks and asymmetry of information between customers and providers. The first evidence of such problems is appearing. Lisas […]

Carpenter Using Plane In Woodworking Woodshop for article on Workplace pensions

What to expect from April’s contributions increase

Steve Webb, Director of Policy and External Communications Our latest policy paper looks at the potential impact of the upcoming statutory phasing increase, and how to help your clients. The first phase of automatic enrolment has been a huge success. One million employers have automatically enrolled around nine million workers into a workplace pension. When […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. And how often does the FCA excuse itself from responding in full to a FOI request on the grounds of cost?

  2. The FCA staff in this have no “skin in the game”. Were I the firm concerned I would be consdiering naming those individuals who expect you to work for NOTHING for info abotu a different firm. If the outcome is the FCA lose, then the individuals pursuing this have wasted npot just the firms time and money, but all out time and money as we pay the FCA salaries. The quid pro quo is that the firms name needs to be out their too if that;s the case, win or lose and they pay costs if they lose.
    Until FCA staff have skin in the game, even if it is being known as a KNOB, they are free to dictate to all and sundtry without recourse, even if being unreasonable. I’ve said it before and I’ll say it again…. I consider the FCA to be morally corrupt, especially with theri dogmatic pushing trhough of the FOS limit from £150k to £350k contrary to the majority of feedback explaining the problems this would cause with PI, which is just starting now.

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com