Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

'We'll test our powers to the limit', says UK financial watchdog on scams

Published 07/15/2021, 02:51 AM
Updated 07/15/2021, 05:42 AM

By Huw Jones

LONDON (Reuters) -Britain's financial watchdog said on Thursday it will become more assertive to get onto the front foot in weeding out bad firms and tackling "an epidemic" of online scams.

The Financial Conduct Authority (FCA) has come under heavy criticism for its botched handling of London Capital & Finance, the investment fund whose collapse is forcing the government to use taxpayer money to compensate thousands of investors.

Former finance ministry official Nikhil Rathi, who became chief executive last year, has already revamped his top team.

The watchdog will spend 120 million pounds ($166 million) over three years to improve its data strategy to tackle fraud better, Rathi said at the launch of his first annual business plan.

"We are going to test our powers to the limit," Rathi said.

An 11 million pound digital marketing campaign will target the younger "have a go" consumers snapping up cryptoassets, he said.

A focus on protecting vulnerable consumers could mean wealthy investors finding it harder to get compensation, and there will be a review of compensation criteria used by the Financial Services Compensation Scheme, Rathi said.

It dovetails with a consultation on a new "duty of care" to "call out fairly quickly" firms that are not taking account of consumer needs.

Simon Morris, partner at CMS law firm, said talk about testing the limits of power points to a revival of the watchdog's discredited "shoot first, think second" approach of a decade ago.

The FCA is facing calls to do what it can to help the City of London compete globally after being largely severed from Europe since Brexit.

Rathi said there would be "no scenario in which we will return to a light touch, don’t-ask-don’t-tell philosophy". Foreign firms wanting to operate in Britain should expect a "demanding review" rather than an automatic licence, he said.

The FCA, along with the Bank of England, is exploring opening an office in the northern English city of Leeds with at least 100 staff based there at the end of 2022, and doubling headcount to over 200 in its Edinburgh office, Rathi said.

($1 = 0.7220 pounds)

Latest comments

500
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.