In a damning report the Financial Conduct Authority (FCA) has been labelled “incompetent at best, dishonest at worst” by MPs from across both Houses of Parliament.
The 350-page report accused the UK’s chief regulator of systemic failures, saying it had been too slow to act to protect consumers, had mishandled whistleblower information and there was a “defective culture” when it came to transparency and openness, leading to bullying and discrimination against those raising issues and challenging decisions.
The FCA has strongly rejected this characterisation of its operations.
The report which has been presented to Parliament was compiled by the All-Party Parliament Group (APPG) on Investment Fraud and Fairer Financial Services. Its conclusions were based on testimony from 175 individuals, including former FCA employees, whistleblowers and those who have fallen victim to financial scams and fraud.
The APPG consisted of 30 MPs and 14 members of the House of Lords.
It described the FCA as “too often failing”, and doing too little, too late to prevent wrongdoing. The report said the FCA’s actions were often “slow and inadequate” and that its leaders were “opaque and unaccountable”. The report also quoted a former employee describing the working environment as being “the worst staff culture I have ever experienced in nearly 40 years”.
The APPG suggested a series of reforms, some of which will include legislation. This includes establishing a supervisory council to regularly review the FCA’s effectiveness, changing how the FCA is funded and overhauling the way the senior leadership team is appointed.
In a comment to the Financial Times the FCA said “We sympathise with those who have lost out as a result of wrongdoing in financial services, however we strongly reject the characterisation of the organisation.”
“We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy.”
The regulator also pointed to internal surveys showing rising staff engagement and recent actions, including a £320m transformation plan, as evidence of its progress.
