Select committee: Treasury Committee
Conclusion 20
Fourth Report - The Financial Conduct Authority’s Regulation of London Capital & Finance plc
Published 24 Jun 2021
Paragraph 122
Addressed to HM Treasury
Treasury Committee The Financial Conduct Authority’s Regulation of London Capital & Finance plc All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
The FCA recognises that it has a statutory duty to protect customers from fraud. In the case of LCF, the regulator fell short, due to a culture that saw fraud as principally a matter for the police, and its lack of enthusiasm to look beyond the perimeter. Dame Elizabeth recommended that “the FCA should ensure that its training and culture reflect the importance of the FCA’s role in combatting fraud by authorised firms.” We note the steps the FCA has taken to address the culture of dealing with fraud, including training staff and launching another phase of its Scamsmart campaign.
From: Treasury Committee, Fourth Report - The Financial Conduct Authority’s Regulation of London Capital & Finance plc (HC 149), paragraph 122, 24 June 2021
Government response
The government responded to the whole report on 13 September 2021 (deadline 24 August 2021).
Summary written by Accountability Index from the government's response. It is not the government's own words.HM Treasury's response says the Government has "fully considered" the Committee's recommendations, agrees with some, and does not consider a formal FCA power to recommend perimeter changes "necessary".
- On the regulatory perimeter, the Government "considers that the existing arrangements for examining and, where relevant, amending the regulatory perimeter are effective", and does not consider it "necessary" to give the FCA a formal power to recommend changes.
- On mini-bonds, the Treasury "is aiming to publish its response to the consultation and bring forward plans for legislation in the autumn", rather than by the end of September 2021 as the Committee recommended.
- On fraud, the Home Office is developing a Fraud Action Plan, to be published "after the 2021 Spending Review", which "will consider any potential legislative or regulatory change required".
- On Financial Promotion Order exemptions, the Treasury "has already commenced work with the FCA to review exemptions" for high net worth individuals and sophisticated investors.