Recommendations & Conclusions
10 items
16
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
We therefore reiterate a recommendation made by a previous Treasury Committee, that the FCA be given the formal power and remit to be able to recommend formally to the Treasury changes to the perimeter of regulation, where that would enhance its ability to meet its objectives, in particular to prevent …
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We therefore reiterate a recommendation made by a previous Treasury Committee, that the FCA be given the formal power and remit to be able to recommend formally to the Treasury changes to the perimeter of regulation, where that would enhance its ability to meet its objectives, in particular to prevent consumer harm. The FCA should set out any costs, both to firms and consumers. It would then be for the Treasury to consider such a recommendation promptly. All such recommendations and Treasury responses should be publicly disclosed.
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Government response AI summary
The government details the FCA's existing powers and actions to tackle non-compliant financial promotions and prevent consumer harm, but it does not address the specific recommendation to give the FCA formal power to recommend changes to the perimeter of regulation.
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HM Treasury
21
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
The FCA should develop a strategy for how it will approach fraud risks that are outside the perimeter of regulation but involve authorised firms. That strategy should be set out in the next perimeter report.
Government response AI summary
The government commits to developing a strategy for tackling fraud risks outside the regulatory perimeter but involving authorised firms, improving partnerships, and publishing details of this work in the next perimeter report.
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HM Treasury
28
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
The Government has taken a positive step by introducing the primary legislation necessary to establish the LCF compensation scheme. If the Bill has a successful passage through Parliament, the Treasury should ensure a smooth running of the compensation scheme, without any further delays, making sure that eligible LCF bondholders are …
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The Government has taken a positive step by introducing the primary legislation necessary to establish the LCF compensation scheme. If the Bill has a successful passage through Parliament, the Treasury should ensure a smooth running of the compensation scheme, without any further delays, making sure that eligible LCF bondholders are clear about the process, and can receive payment as soon as practicable.
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Government response AI summary
The Treasury is progressing work on LCF compensation scheme rules with the FSCS, which is committed to ensuring payments to eligible bondholders within six months of the Bill's Royal Assent.
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HM Treasury
30
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
The FCA should provide us with an update on its resolution of LCF complaints by 30 September 2021. (Paragraph 160) Financial promotions
Government response AI summary
The government commits to providing an update to the Committee on the FCA’s resolution of LCF complaints by 30 September 2021, noting that 98% of complainants had already received a response by 23 August 2021.
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HM Treasury
31
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
We welcome the Treasury’s ongoing consultation on approving financial promotions. We trust that the results of the consultation will be published swiftly and the conclusions implemented as soon as possible.
Government response AI summary
The government confirmed it published the response to its consultation on 22 June 2021 and intends to bring forward legislation to establish a regulatory gateway for financial promotion approval when parliamentary time allows.
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HM Treasury
32
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
We welcome the steps taken by the FCA to change its approach to financial promotions, as well as introducing the “use it or lose it” programme. In future, the FCA should be more interventionist and should make more frequent use of its powers rather than maintaining a culture of risk …
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We welcome the steps taken by the FCA to change its approach to financial promotions, as well as introducing the “use it or lose it” programme. In future, the FCA should be more interventionist and should make more frequent use of its powers rather than maintaining a culture of risk aversion.
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Government response AI summary
The government detailed extensive ongoing efforts and specific measures taken since 2019, including establishing a Joint Supervision and Enforcement Team, using formal powers more assertively, and developing a new data-led strategy for financial promotions, to be more interventionist and proactively disrupt harm.
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HM Treasury
33
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
The Financial Promotion Order would benefit from reform due to the increasing risks associated with the exemptions that allow customers to self-certify as high net worth or sophisticated.
Government response AI summary
The government stated it keeps the legislative framework for financial promotions under review, has commenced work with the FCA to review exemptions for high net worth and sophisticated investors, and intends to bring forward legislation to establish a regulatory gateway for promotion approval.
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HM Treasury
34
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
The Treasury should—as a matter of priority—re-evaluate the Financial Promotion Order exemptions to determine their appropriateness and consider what changes need to be made to protect consumers.
Government response AI summary
The government states it is already reviewing Financial Promotion Order exemptions, specifically for high net worth and sophisticated investors, and plans to bring forward legislation to establish a regulatory gateway for approving financial promotions when parliamentary time allows.
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HM Treasury
35
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
It is very disappointing to see that despite the numerous representations made to the Government, measures to address fraud via online advertising have not been included in the draft Online Safety Bill. This is a missed opportunity to act and potentially help prevent another LCF-type event. The increasing frequency of …
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It is very disappointing to see that despite the numerous representations made to the Government, measures to address fraud via online advertising have not been included in the draft Online Safety Bill. This is a missed opportunity to act and potentially help prevent another LCF-type event. The increasing frequency of fraudulent activity online that leads to scams and financial harm is alarming, and the Government must intervene as a matter of urgency.
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Government response AI summary
The government confirms that fraud will be included in the scope of the Online Safety Bill, directly addressing the committee's concern. It also outlines further actions including a DCMS consultation on online advertising, FCA investigations into platforms' compliance, and an upcoming Home Office Fraud Action …
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HM Treasury
37
Recommendation
Fourth Report - The Financial Conduct A…
Accepted
We recommend that the Government should include measures to address fraud via online advertising in the Online Safety Bill, in the interests of preventing further harm to customers being offered fraudulent financial products.
Government response AI summary
The government confirms that fraud will be included within the scope of the Online Safety Bill to protect against scams on social media and dating sites. It also highlights further considerations for tougher online advertising regulation and ongoing work to combat fraud.
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HM Treasury