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The UK’s Financial Conduct Authority is proposing to speed up its decision making

Author: Syedur Rahman  8 December 2021

But Syed Rahman of financial crime specialists Rahman Ravelli is concerned the move may have the opposite effect.

The UK’s financial regulator has said that it intends to change the way it decides whether to open criminal or civil proceedings so that action can be taken quicker and more easily.

In a policy paper, entitled “Issuing statutory notices – a new approach to decision makers’’, the Financial Conduct Authority (FCA) says it is making changes in response to recent developments and criticism of its conduct.

It says: “The environment in which we operate is changing rapidly. There have been dramatic changes to the financial services regulatory landscape, reflective of the wider economic, technological and social changes, as well as the challenges of the pandemic and the UK’s exit from the EU.

“To tackle the challenges faced by consumers and industry, we need to make faster and more effective decisions to promote the right outcomes for consumers, markets and firms. This need for change was also made clear in the criticisms and recommendations set out in the independent reviews into our regulation of London Capital and Finance (LCF) and the Connaught Income Fund.’’ 

The FCA was heavily criticised a year ago when independent investigations into its handling of the LCF mini-bond mis-selling and the collapse of the Connaught fund revealed several regulatory failures. At that time, FCA Chair Charles Randell spoke of the regulator being sorry for mistakes that were made and admitted the reports had highlighted the need for the FCA to change to protect consumers.

The FCA has since accepted the recommendations contained in the reviews of its response to LCF and Connaught. The policy paper states that in future there will be a focus on “significant misconduct cases, where the harm has already materialised’’, with greater responsibility and accountability placed on FCA staff and a more assertive use of the FCA’s powers.

The FCA is proposing that its executives should decide whether to take criminal or civil enforcement actions, rather than the independent regulatory decisions committee. Yet if this proposal goes ahead, it may not have the desired effect. It could lead to decisions made by the FCA being referred to the Upper Tribunal for review. Any legal challenges to the FCA’s decision-making process may lead to it being slowed down rather than made quicker.

This article originally featured on Mondaq, it can be read here.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.

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