The Financial Conduct Authority (FCA) has made a significant impact over the past year by preventing 627 firms that failed to meet minimum standards from operating, a 30% increase from the previous year.
The FCA’s continued efforts to uphold high standards in the financial services sector have been revealed as part of its report on its performance during 2022-2023.
In a challenging year marked by rising costs of living, the FCA has quickly set out guidelines for lenders to provide tailored support to borrowers in difficulty, warned insurers against exposing their customers to unnecessary add-ons or unfair penalties, and secured up to £47m in redress for mistreated borrowers. The regulator has also promoted competition and proposed listing reforms to remove barriers for companies seeking capital.
The first performance statistics since the FCA’s 3-year strategy was initiated have also been published, with the FCA estimating a £17 benefit for every pound spent on its operations in the last year.
Chair of the FCA, Ashley Alder, said: “Maintaining high standards is key to supporting growth. We are helping firms test their innovative products, guiding firms through the authorisation process and are supporting a range of supply and demand-side market reforms. On 31st July, the new Consumer Duty will raise the bar for retail financial services and place good consumer outcomes at the heart of everything they do.”
FCA chief executive Nikhil Rathi added: “The FCA has evolved into a more proactive, assertive and data-led regulator better equipped to face challenges like the rising cost of living in a more agile and effective way. Tailored support is important for those struggling with debt and we continue to work with firms to make sure people receive the right help to manage their finances, especially with the rising cost of living.”
The FCA’s initiatives over the past year have included scanning 100,000 websites daily to uncover unlawful activity, penalising firms to the tune of £215.8m, prosecuting market manipulation, money laundering, insider dealing and investment fraud, and intervening against illegal crypto activity. The authority has also finalised rules for the Consumer Duty set to take effect at the end of July, and launched an £11m InvestSmart campaign to combat misleading advertising and guide inexperienced investors.
Among other achievements, the FCA has proposed new listing rules, reduced the authorisations caseload by 60%, and worked with 870 firms to test innovative products. Through the Early and High Growth oversight programme, it has ensured that over 300 firms maintain high standards from the outset.
