View more on these topics

‘Warning notices will treat firms like would-be criminals’

The Financial Conduct Authority’s powers to publicise early warning notices will treat firms and individuals like “would-be criminals”, says City of London Conservative MP Mark Field.

The Financial Services Bill will give the FCA the power to publicise the details of firms and individuals it is investigating at the warning notice stage. The bill also reduces the number of days a firm has to make representations to the regulatory decisions committee from 28 days to 14.

In a debate on the bill in the House of Commons this week, former Shadow Treasury minister Field warned the proposals could cause firms and individuals reputational damage before they have a chance to defend themselves.

He said: “The argument in favour of the change is that this is similar to a criminal case but that misses the important difference between the cases and represents a worrying trend in the thinking, to the effect that everyone in the industry is somehow a would-be criminal. The reality is that, essentially, the Daily Mail test means that all the damage to the firm’s reputation will be done before any due process has been followed.”

The Government rejected the FSA’s calls to scrap the requirement for the FCA to consult firms and individuals before publicising details of ongoing enforcement investigations.

Guidance published alongside the bill last month says: “The Government notes the requirement to consult does not mean the regulator must seek the consent of the firm or individual in question but considers that pre-disclosure dialogue is crucial to allow the regulator to determine whether disclosure is appropriate in the circumstances.”

Axxis Financial Planning director Owen Wintersgill says: “The FCA’s power should only be used if there is a risk of consumer detriment. If there is not, dancing on a firm’s reputation before a proper investigation would seem premature.”

Recommended

Putting the lights on

All the kerfuffle over Stephen Hester’s bonus ignores one key point. I wonder how many people would voluntarily give up significant income they had been promised for doing their job, particularly how many of the most vociferous critics? It recently emerged that some of the biggest critics of tax planning in family companies are using […]

2

Amps to form platform sub-committee

The Association of Member-directed Pension Schemes is forming a platform sub-committee to reflect anticipated growth in the market. The Sipp and SSAS provider trade body says the sub-committee is being established to reflect the increasing importance of platforms in the pensions sector. The sub-committee will be chaired by James Hay head of technical support Neil […]

thumbnail

What employers should expect over the next five years

A major feature of our articles is looking into the Jelf Employee Benefits crystal ball to predict changes and trends that may influence the short and medium term shape of UK employee benefits.  By flagging such changes early we aim to provide our followers with the tools to make sensible and informed decisions on their benefits offerings.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment