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Treasury committee calls for break-up of ‘overloaded’ FCA

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MPs in the influential Treasury committee are calling for the FCA to separate out its enforcement division following a damning report in the collapse of HBOS.

In a report published yesterday, the committee said an “independent enforcement function” should sit between the FCA and PRA.

It says the current system – where one body supervises, applies and prosecutes the law – is “outdated and can be construed as unfair”.

It adds: “Separation would allow all three regulators – the FCA, PRA and an enforcement body – to enjoy much greater clarity over their objectives.

“There is a danger, especially with the FCA, that its multitude of objectives and initiatives are leading to regulatory overload. An FCA with fewer objectives, and a single separate body responsible for enforcement, would probably result in better accountability and better outcomes.

It adds: “The Treasury Committee expects the Treasury to appoint an independent reviewer to re-examine the case for a separate enforcement body.”

The recommendation is part of the committee’s review of several reports in to the failure of HBOS.

Only one former HBOS director, Peter Cummings, was fined in the aftermath of HBOS’ failure.

The FCA was criticised in December 2015 after admitting it would be unable to fine any former HBOS executives because the bank’s failure fell outside the six-year statute of limitation on fines.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Trevor Harrington 26th July 2016 at 9:46 am

    Breaking it up, and re-inventing the existing wheel as a number of smaller ones is a total waste of time, and more importantly, a complete waste of money … our money.

    We have done this several times before, and all that happens is that the same people re-appear in the same jobs, along with their same prejudices and incorrect views and opinions of the profession over which they are charged to regulate. In the meantime, many, if not all of them will have picked up huge and totally unjustifiable pay-offs, and redundancy agreements from the previous body, and banked a substantial windfall … thank you very much.

    Just get the existing people, in the existing regulator to do the damed job properly – this will mean putting people in there who know what they are talking about, and it is not the usual collection of nepotistic perpetual regulators and civil servants with no experience of the front line whatsoever.

    What is really infuriating is that we are repeating the same mistakes with the regular reinvention of our regulators year afrer year since 1988.

    Almost any bunch of retired small IFAs could solve the regulatory issues of the last 28 years in about 12 months, and would not even breal into a sweat !!!!

  2. The use of the word “overloaded” is indeed kind…….. bloody useless is nearer the mark.

    With a day when we hear from FOS about big increases in SIPP complaints…. again !! confirms retrospective regulation is the biggest threat to the consumer than any amount of dodgy so called advisers, the good driven to bankruptcy, the bad away on their toes with the loot, and the regulator left scratching its head, at the horse in the field and the stable door flapping in the breeze !

    When you loose your spans of control you cease to be effective, forever chasing your tail, and its not about as, Ms McDermott saying about the regulate, de-regulate cycle its all about bringing everything back to basics do the simple things right……. can I highlight the All Blacks, probably the most successful consistent sports team ever year in year out,……. why because they just do the simple and basic things perfectly, every time, that,s it,… then and only then, do you inspire excellence, as a team and individually !

    When you constantly (as the FCA do) look over your shoulder at what has come to pass, you neither change anything or become better, history is history its gone, let it go, you cannot change it, no matter how much resource or money you throw at it !!

  3. Great Idea Trevor. Get a load of retired IFAs. Put them in a provincial office and get them to regulate professional advisers. Could be done at half the current price and without the CIty salaries and city attitudes

  4. Julian Stevens 26th July 2016 at 1:20 pm

    No regulator can do everything, and trying to prioritise everything results in the prioritisation of nothing. It’s all about prioritisation, at which the FCA, like the FSA before it, has shown itself to be disastrously inept. An outside body is required to tell the FCA what to do and to knock a few heads together if it fails. Why isn’t the TSC seeking such powers? And why isn’t APFA ~ with the help of Lord Deben ~ urging it to do so?

  5. Let me get this straight.

    IFA’s should be regulated by retired IFA’s.

    Surely a non starter for obvious reaasons.

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