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The FCAhas published draft guidance onanew power thatallowsittomove faster toremoveregulatorypermissionsthat are nolongerbeing used byfinancial servicesfirms.
Incorrect or outdated permissionson theFinancialServices (FS)Registercan mislead consumers about the level of protection offeredby a firm orgive credibility toa firm’sunregulated activities.
Thechangeswillhelpto prevent scamsandtoensuretheFS Registerpresents a clearerpicture of the permissions firms hold.Firms are required to confirm that the information on theFSRegister is accurate on an annual basis.
Thenewpower,grantedto the FCAviathe Financial Services Act 2021, willstreamlineand shortentheprocess of removing firm permissions.The FCAwill be ableto start thecancellationprocess as soon as it considers permissions are not being used,by serving 14 days’ notice on a firm.The FCA willthenbe able to vary or cancel permissions after 1 month.
As part ofitstransformation,the FCArecentlyannouncedseparatechanges to its decision-making and governancetoenable it to make faster and more effective decisions.
Mark Steward,Executive Director of Enforcement and Market Oversight at the FCA, said:
'We want to use this power to take quicker action to prevent consumers being misled. Itis part ofourtransformation anddrive to be more assertive, drawing on an innovative approachandusing new streamlined processesto make important regulatoryinterventions.
'Firmscan andshould apply tohavetheir permissionscancelledif theyno longerplantouse thembut many fail to doso.We understand thatbusiness modelsmay evolve over time and there may be valid reasons why regulatory permissions are not being used, but unless firmsnotifyusandkeep their permissions up to date, they will risklosing market access'.
TheFCAhas already undertaken a‘use it or lose it'exercise with firms –reminding themof their obligation to review regulatory permissions and ensure they are up to date or removed if not needed.
As part of that work firms that have not used their permissions for 12 months or more are at risk of having them cancelled via the existing cancellations process.Itispart of the FCA’s response to tackleissues raised by Dame ElizabethGloster’sreview into the regulation of London Capital & Finance (LC&F).
The consultation will run until29October2021.
Notes to editors:
Changes affect only firms authorised by the FCA under Part 4A of FSMA, excludes payments and e-money firms and firms authorised by the PRA.
ReadCP21/28: New cancellation and variation power: Changes to the Handbook and Enforcement Guide
Financial Services Act 2021
Read more about Use it or Lose it.
Read more about FCA proposing changes to streamline decision-making.
https://www.fca.org.uk/news/press-re...rm-permissions
