The Financial Conduct Authority’s Regulation of London Capital & Finance plc
Treasury Committee
Closed
Inquiry
22
Recommendations
16
Conclusions
1
Report
6
Letters
5
Events
Activity timeline 8 events
20 Oct
2021
2021
13 Sep
2021
2021
24 Jun
2021
2021
24 May
2021
2021
19 May
2021
2021
19 May
2021
2021
28 Apr
2021
2021
Reports 1 report · click to expand
| Title | HC No. | Published | Items | Response |
|---|---|---|---|---|
| Fourth Report - The Financial Conduct Authority’s Regulation of … | HC 149 | 24 Jun 2021 | 38 | Responded |
Recommendations & Conclusions
9 results
3
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
Given that Dame Elizabeth’s report cited Megan Butler as bearing responsibility for important areas of...
Given that Dame Elizabeth’s report cited Megan Butler as bearing responsibility for important areas of failure and that her recruitment was conducted internally with just one alternative candidate, we understand why many will feel that “a buck that does not …
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Government Response
The government's response explains that while the FCA is not formally under the Senior Managers Regime, it applies its principles to senior managers, resulting in bonus removals for those involved in LCF failings, although not necessarily termination of employment without personal culpability.
HM Treasury
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5
Recommendation
Acknowledged
Fourth Report - The Financial Cond…
We accept that a degree of shared responsibility is desirable and necessary in an organisation...
We accept that a degree of shared responsibility is desirable and necessary in an organisation such as the Financial Conduct Authority. However, it is not readily justifiable for the FCA to require the firms that it regulates to adhere to …
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Government Response
The government described internal reviews of Supervision Hub processes and training programmes to ensure they are up-to-date and aligned with the organisation's position on unregulated activities, but did not directly address the recommendation for the FCA Board to reflect on applying Senior Managers Regime principles internally.
HM Treasury
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20
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
The FCA recognises that it has a statutory duty to protect customers from fraud.
The FCA recognises that it has a statutory duty to protect customers from fraud. In the case of LCF, the regulator fell short, due to a culture that saw fraud as principally a matter for the police, and its lack …
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Government Response
The government welcomes the report, repeats its apology for LCF failures, and states it has accepted and is implementing Dame Elizabeth Gloster's recommendations, including staff training and strengthening processes, with an update already published to the Committee.
HM Treasury
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22
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
The FCA’s work to prevent fraud is done in partnership with other bodies such as...
The FCA’s work to prevent fraud is done in partnership with other bodies such as the National Crime Agency and Serious Fraud Office. But the police have limited resources and personnel devoted to tackling fraud, and the FCA currently does …
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Government Response
The government acknowledges the seriousness of fraud and is developing an ambitious Fraud Action Plan through the Home Office, which will consider potential legislative or regulatory changes after the 2021 Spending Review.
HM Treasury
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23
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
There may be scope for the Government to consider whether the FCA should be given...
There may be scope for the Government to consider whether the FCA should be given more powers to enable it to investigate fraud and financial crime. We will continue to consider this as part of our Economic Crime inquiry.
Government Response
The government states its serious commitment to tackling fraud through cross-government work and the Home Office's upcoming Fraud Action Plan, which will consider potential legislative or regulatory changes.
HM Treasury
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24
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
The unusual way in which LCF used mini-bonds and the high level of risk associated...
The unusual way in which LCF used mini-bonds and the high level of risk associated with any such investments highlight the need for the Treasury’s intervention. We welcome the Treasury’s ongoing consultation on the regulation of non-transferable debt securities but …
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Government Response
The Treasury confirmed that its consultation on non-transferable debt securities (NTDS) has closed and it aims to publish its response and introduce legislation in the autumn.
HM Treasury
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26
Recommendation
Acknowledged
Fourth Report - The Financial Cond…
The FCA should consider how it can improve its customer information so as to help...
The FCA should consider how it can improve its customer information so as to help equip customers with the ability to deal with the important financial decisions that they will have to take, and the risks that are attached to those decisions.
Government Response
The government acknowledges the need to improve consumer support for financial decisions, stating it is engaged in ongoing work with stakeholders to address regulatory barriers and develop varied services, including engagement with MaPS.
HM Treasury
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27
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
The collapse of LCF brought about a huge degree of uncertainty for bondholders, some of...
The collapse of LCF brought about a huge degree of uncertainty for bondholders, some of whom were faced with an anxious wait for the publication of Dame Elizabeth’s report and further details of the Government’s compensation scheme. We welcome the …
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Government Response
The government acknowledged the Committee's support for the LCF compensation scheme, detailing that the Treasury is progressing work with the FSCS, who aims to pay eligible bondholders within 6 months of Royal Assent.
HM Treasury
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36
Conclusion
Acknowledged
Fourth Report - The Financial Cond…
We note the Government’s intention to consider additional legislative and non- legislative solutions to tackle...
We note the Government’s intention to consider additional legislative and non- legislative solutions to tackle fraud via advertising, emails or cloned websites, including the online advertising programme, but we believe quicker action is required to protect consumers and help the …
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Government Response
The government response details multiple initiatives to tackle online fraud, including the inclusion of fraud in the Online Safety Bill, upcoming DCMS consultation on online advertising, FCA action on financial promotions, and the Home Office developing a Fraud Action Plan to be published after the 2021 Spending Review.
HM Treasury
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Correspondence 6 letters
20 Oct 2021
From committee
Letter to the Chair from the Chief Executive of the FCA, regarding the TSC report on LCF, dated 30 September 2021
Parliament page
24 May 2021
From committee
Letter to the Chair from the FCA Chief Executive relating to independent reviews
Parliament page
19 May 2021
To committee
Letter from the Chair to the Economic Secretary to the Treasury, relating to London Capital & Finance
Parliament page
19 May 2021
To committee
Letter from the Economic Secretary to the Chair relating to London Capital & Finance
Parliament page
28 Apr 2021
To committee
letter from the Economic Secretary to the Chair, relating to the session the Committee held on Wednesday 21 April
Parliament page
9 Feb 2021
From committee
Letter to Chair from Rt Hon Dame Elizabeth Gloster regarding independent investigation into FCA's regulation of London Capital and Finance plc, dated 8 February 2021
Parliament page