The Government has rejected Labour’s calls to force the Financial Conduct Authority to maintain an independent appeals process through the regulatory decisions committee.
The RDC hears appeals against enforcement, authorisation and supervisory decisions. It is made up of external committee members from the industry, including IFAs, who report to the FSA board.
A frequently asked questions document on FCA transition, published by the FSA in August, reveals that a decision on whether to retain the RDC has yet to be made.
Speaking in a House of Lords debate on the Financial Services Bill yesterday, Labour peer Baroness Dianne Haytor said firms need “fair and objective” second hearings and the RDC should be enshrined in statute.
She said: “There has been much concern, partly through ideas floated on the FSA website, that the RDC will not continue under the new structure. Surely the existence of such a body should be clearly set out on the face of the bill so it cannot be simply abolished or amended by the new regime.
“The fairness of the FCA to publish its warning notices, a power which I strongly support, has been explicitly contingent on the RDC’s involvement and decision making, hence the concern that such a committee may be abolished without the parliament’s approval.”
Treasury commercial secretary Lord James Sassoon said the Government will trust the regulator to bring in its own appeals process.
He said: “I believe it is appropriate to allow the successor organisations to make their own decisions. We agree that significant decisions should be be made, for the avoidance of doubt, with individuals who did not collect evidence to ensure they are subject to scrutiny. It is important that decision will be subject to due process.
“But it is consistent with the whole legislation to set the outcomes we want and then leave it up to the independent regulators to establish the detailed processes within them. We are moving towards a more judgement based process and we must recognise that if it is an area that the FSA has exercised judgement then we should leave it to them.”
Investor Profile partner Jaskarn Pawar says the FCA should be forced to have an appeals process.
He says: “It is certainly worthwhile and valid to have an independent appeals process. It goes for any organisation and the FSA and FCA is no different.”