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Martin Wheatley: FCA is not ‘picking off firms one by one’

FCA chief executive Martin Wheatley says the regulator is focusing its attention on wider markets rather than “picking off firms one by one”.

In a speech at the ICI Global trading and market structure conference today, Wheatley said the regulator’s announcements around asset management in recent months are a “bellwether” of FCA direction for 2014 and beyond.

He said: “If you are looking for a useful bellwether of FCA direction, this is it: a more probing analysis of culture and ethics versus rules. A more assertive focus on wider markets as opposed to picking off individual firms one by one.

“A greater inclination to step in early, rather than wait for problems to scale up and become less manageable.”

He said improving standards in the asset management industry is “not something for the UK to fear”.

Wheatley said: “As other markets cleanse their own operations – as we are seeing in Singapore, Hong Kong, the US, Australia and so on – it becomes increasingly important to do the same domestically.

“In other words, this is not something for the UK to fear. It is something for us to lead.”

He added 2014 will be “an important period of consolidation”.

Wheatley said: “It will be less ‘exciting’ maybe than previous years – but also a platform to bed in regulatory change and move things forward.

“The next 12 months should be increasingly focused on transitioning towards next steps. The delivery of standards that will allow us to begin to turn the page on a very difficult chapter in financial history.”

He said the industry faces two key challenges in this: achieving cultural transition and technical transition.

He said cultural transition means “publicly demonstrating there is clear blue water between the past and future”, while technical transition means “making sure we get the nuts and bolts of international regulatory reform right so markets remain deep and liquid”.


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There are 8 comments at the moment, we would love to hear your opinion too.

  1. “if you are looking for a useful bellweather” Not really Mr. Wheatley. Most IFAs complaints about our profession’s regulatory regime is that there is very little black and white just infinite shades of grey. That makes planning not just for clients but for the future health of one’s business harder than it needs to be.

    Perhaps less equivocation and more clear direction would be useful?

  2. E L Wisty (an only twin) 10th December 2013 at 9:02 am

    I think he protests too much.

    Of course, if he was really minded to devastate the IFA sector, he would sit by and allow a legacy decision by his predecessor to make IFAs scapegoats for the appalling failings of a large ACD, who:

    – allowed the publication of grossly misleading fund information;

    – published overstated share prices;

    – did a ‘no-blame’ deal worth only 15% of the original investment cost; and

    – failed to have any PI in the subsidiary’s own name.

    But, of course, he’d never allow that ………….

  3. “He said the industry faces two key challenges in this: achieving cultural transition and technical transition.”

    As far as I can there’s only one challenge. Survival….!!!

  4. If it looks like a duck, walks like a duck, and quacks like a duck it’s probably a duck… even if it claims to be a dog…

  5. One might hope that “a change in ethics and culture” will mean the regulator accepting responsibility for its own failures of oversight instead of, as was standard practice on the part of the FSA, blaming them on intermediaries on the grounds of failure to undertake adequate due diligence.

    Intermediaries rightly feel aggrieved at the manifest injustice of being condemned for having failed to identify problems such as those that came to light with ArchCru, of which the regulator handily washed its hands of all and any blame, on the grounds that whilst it may authorise a provider and its funds and products, this should not be inferred as constituting any sort of approval.

    How can the regulator argue that authorisation and approval are two entirely different and separate things? By such a line of reasoning, the regulator appears to be saying ~ or, at least, to have said of this particular provider ~ that provided its weighty application packs are completed to its satisfaction, its obligations end there. Presumably ArchCru, like everybody else, was required to submit periodic regulatory returns. What did the FSA do with the information contained in those returns? Were they examined in any depth? Did they not reveal that things were amiss and that regulatory investigation was urgently needed? What is the purpose of gathering all this data if the regulator does nothing with it? Isn’t the whole purpose of gathering such data supposed to be to enable to regulator to prevent motorway pile-ups along the lines of all those that the FSA to see coming? It’s all very well to talk about ethics and culture on the part of others, but what about the responsibilities of the regulator itself?

  6. The FCA needs to sort it’s complaint handling out. We made a formal complaint about FCA as outlined below 3 months ago and the complaint hasn’t even been acknowledged as a complaint as such yet.

    Extract of follow up letter to FCA 2 weeks ago (response still awaited):

    5. My letter of 26 September 2013 also expressed concern [at paras.32-37] over the legal
    incompetence of your purported s.165 Notice of 18 September 2013, the systematic nature
    of these failings amongst supervisory staff and the manner in which you (or more specifically
    Mr BXXXXX) responded when your attention was drawn to this matter during the
    conversation of 24 September 2013 (THIS WAS A RECORDED CONVERSATION A COPY OF WHICH WAS SUPPLIED TO THE FCA AS REQUESTED AND SEVERAL JOURNALISTS). Your response “acknowledges” the points that I made,but then deems it appropriate to disregard this serious failing on account of Mr Castle and the firm having attempted to provide you with the information they believed you to be seeking. This is perverse: should Mr Castle and the firm really have attempted to reject any
    obligations they might have had under Principle 11 or Statement of Principle 4 in order for you to take this matter with the seriousness it should warrant?
    6. The Authority should have systems and controls in place to ensure that it does not mail legally incompetent threatening correspondence to its levy-payers and the materials disclosed in response to our ‘right to know’ request give us no comfort.
    7. It is therefore our view that the Mr Castle and the firm are entitled to regard these matters as outstanding and to look forward to some genuine corrective action by the Authority.
    Next Steps
    14. Given that the “main concerns” and “other concerns” as listed in your letter of 06 November 2013 have already been dealt with by the firm taking a proactive approach to continually evolving its Terms of Business, you will appreciate that the firm does not propose to make any substantial amendments to the version provided on 09 October 2013. Nevertheless, the firm would of course consider any amendments to particular words, phrases or sentences where these are specified by the Authority, should you so wish to provide these. The firm has always been of the view that the broad tone and content of its Terms of Business is consistent with any regulatory obligations and has always sought constructive input from the Authority.
    15. To be clear, if you are undertaking to review any document to ascertain whether or not it complies with your “regulatory requirements”, the absence of you raising points, or you raising points that are then resolved, is the same as you confirming that the end document then meets your regulatory requirements. Whilst you may wish to play language games around why this might not be “approval”, the firm is nevertheless entitled to rely upon the results of your review should you undertake it.
    16. The penultimate paragraph of your letter of 06 November 2013 claims that the letter is “confidential”. You do not however specify any particular provision supporting this statement, despite Mr Castle having asked you to cite one during our conversation of 24 September 2013. Whilst my own view is that there is little merit in ever circulating copy correspondence, if the concern is that the Authority’s personnel do not wish erroneous statements or actions to be subject to adverse scrutiny, it may be instructive for them to take greater care in how matters are approached.
    17. I would in any event now invite you to treat the matter of whether the firm is using compliant Terms of Business as closed, or otherwise to bring the matter to a speedy resolution, and instead address the critical issue of how and why this issue was approached so clumsily and aggressively. I should reiterate that Mr Castle remains keen on a face-to face meeting should it be needed to clear up any remaining points.

  7. E L Wisty (an only twin) 10th December 2013 at 11:09 am

    @ Philip Castle

    Good on you. Have any of the copied-in journalists reported on this, or sought answers from the FCA?

  8. FAO Tracy Legg 10 12 2013

    Dear Ms Legg,

    Further to your call earlier on today in which you mentioned you had read my comments on Moneymarketing which fall under ARTICLE 10 (DETAILED BELOW) with regard failure of FCA to acknowledge or investigate complaints about itself, please find attached the two letters in which we expressed our dissatisfaction (often known as a complaint) with regard the FCAs handling of matters with regard letters and telephone discussions with my firm (which were recorded with the FCAs agreement and knowledge)

    I look forward to an earlier reply as to whether these issues fall within the FCA’s definition of a complaint and clarification if that is the case as to whether the complaints procedure has or has not been followed correctly.

    RIGHTS ACT 1998: This guarantees the right to pass information to other people and
    to receive information that other people want to give you. It also guarantees the
    right to hold and express opinions and ideas. Journalists and people who publish
    newspapers and magazines can use Article 10 to argue there should be no restrictions
    on what they write about. Artists and writers can use it to defend themselves against
    people who try to censor their work. Article 10 is a ‘qualified’ This means that the
    Government or a public authority may be allowed to restrict or interfere with the
    right in certain circumstances. The Government or the public authority must show
    that there was a clear legal basis for the restriction or interference. Its actions must
    pursue one of the eight aims set out in Article 10, which include: No 1 the prevention
    of crime; No.2 the protection of morals; No.3 the protection of other people’s rights or
    reputations; No. 4 the protection of confidential information. It also has to show that
    the interference was ‘necessary and proportionate’ (that it was done for a very good
    reason and went no further than it needed to).

    Phil Castle
    Financial Escape Ltd
    Advisers answering to you, with a focus on free will
    Cliff Street Chambers, 12 Cliff Street, Ramsgate, Kent, CT11 9HS
    Phone: 01233 280960
    Skype name: fescape

    Authorised and Regulated by the Financial Conduct Authority to provide investment, pension, mortgage and general insurance advice. Your home may be repossessed if you do not keep up repayments on your mortgage. Some of the areas we advise or provide services to you upon are not Regulated at all.
    Written details are available on request. Please see our Client Agreement & Terms of Business Document for further information.

    Check the Register at FCA no. 425430. Registered as a company in England and Wales no. 5020132

    Please note: all telephone calls are recorded for training and monitoring purposes. The information in this email is confidential and may be legally privileged. If you are not the intended recipient, you must not read, use or disseminate that information. If you have received this email in error or you do not wish to receive this type of email from us, please notify us and destroy it immediately.

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