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Information requests from FCA ‘greater than necessary’

The information requests the FCA makes to regulated firms and the costs associated with such requests are often “greater than necessary”, a performance survey has revealed.

Findings from the FCA and its Practitioner Panel joint survey for 2019 about the FCA’s performance shows the regulator could make improvements in areas including “information requests” and “trust in supervision”.

The FCA says it needs to ensure the costs of providing information imposed on firms are “proportionate” to the benefits achieved.

This comes on the back of a “substantial increase” in the number of fixed firms who said the amount of information requests are “greater than seems necessary”.

Both the Practitioner Panel and the Smaller Business Practitioner Panel raised this as an issue, highlighting the volume of requests and the associated costs to firms.

While flexible firms have overall higher satisfaction scores than fixed firms in terms of “trust in supervision”, they are less likely to agree that FCA staff members have “sufficient experience” or are “appropriately qualified”.

FCA: Most firms satisfied with regulator’s performance

Between January and March 2019, a total of 2,888 firms completed the survey – an increase in response rate to 29 per cent of firms, up from 26 per cent last year.

The FCA says since the survey was conducted it has clarified its approach to supervision and will evaluate the impact of the work and any changes to firm views in the next survey.

In the survey, firms are asked for feedback on how well the FCA is achieving its three operational objectives:

  • Securing an appropriate degree of protection for consumers
  • Protecting and enhancing the integrity of the UK’s financial system
  • Promoting effective competition in the interests of customers

This year, scores against the first two objectives increased slightly. But for the third objective the score of all firms overall decreased from 72 per cent to 70 per cent.

The FCA says this follows a “significant rise” in the previous year after the publication of its Approach to Competition in 2018.

Firms were asked how confident they felt that the FCA’s oversight of the industry will deliver on its strategic and operational objectives. Overall, firms were slightly more likely this year to be confident that the FCA can meet its strategic objective of ensuring that financial markets function well (88 per cent of firms, compared with 86 per cent in 2018).

Fixed portfolio firms, however, are less confident that the FCA is meeting this objective (88 per cent in 2019, compared with 96 per cent in 2018).

FCA to replace Gabriel to ‘improve’ data collection

The FCA also suffered a fall in confidence levels from fixed firms in how they consider the regulator secures customer protection (89 per cent, down from 94 per cent in 2018) and protecting the integrity of the financial system (90 per cent, down from 96 per cent in 2018).

Confidence in the FCA’s ability to promote effective competition is largely unchanged (71 per cent in 2019, compared with 73 per cent in 2018).

The industry continues to express lower levels of confidence in the FCA’s ability to deliver on its third objective of promoting competition, the report shows.

But firms are still largely satisfied with their relationship with the regulator. The overall score for satisfaction was again 7.6 out of 10 this year, following a “steady increase” from 5.9 in 2013, when the FCA was established.

The regulator received an overall rating of 7.2 out of 10, a slight increase on 7.1 last year.

The FCA says it will use the results to “better understand” the issues affecting all firms and to help improve how it works.



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