Treasury Select Committee – Change in Financial Conduct Authority’s culture needed to protect consumers and financial markets

The Treasury Select Committee published a report on the Financial Conduct Authority’s (FCA) regulation of London Capital and Finance plc (LCF).

The Committee supports the views of the current FCA leadership that the organisation needs to become a more ‘proactive’, ‘agile’, ‘decisive’, and joined-up regulator that is willing to act to protect consumers and financial markets. The Committee recommended that the FCA Board should set itself an end date for the transformation programme and create milestones at which changes in culture can be reviewed, which should be published.

The Committee commented that it is not readily justifiable for the FCA to require the firms it regulates to adhere to the principles of the Senior Managers Regime but seemingly not to apply similar principles internally when there are failings of practice and culture in the organisation. There are doubts as to whether the FCA Board has met the standards which it seeks to impose on others. An over-reliance on collective responsibility may deny visible accountability and could lessen confidence in the organisation as a result.