Thursday, 19 March 2015

Are the FCA up to the job?

What are we to expect of the new financial regulator in the UK - The FCA?

A good level of basic competence must be a given. If we want them to prevent the type of fiasco that helped cause the 2008 crash, we need them to be at least awake on the job.

Late last week we sent a notification to them that a website was offering financial promotions without FCA approval. This is in most circumstances contrary to the Financial Services and Markets Act 2000. It was in this case.

The reply we had is copied below

After reviewing the firms website, I can inform you that there are circumstances where unauthorised persons are communicating financial promotions to clients in the UK which will be governed by the financial promotions order under section 21 of the Financial Services and Markets Act 2000 (the Act).

Section 21 (2) of the Act sets out the circumstances in which an unauthorised person can communicate financial promotions as set out in our handbook in PERG 8.9.1.

This is on the basis that the information has been checked and approved by an authorised person. 

If you have evidence that this is not the case you should let me know and I will refer it to the appropriate team within the FCA.

The firms website seems to indicate that their financial promotion has been approved by Crowe Clarke Whitehall.
Firstly this reply gets the name of FCA approval firm completely wrong - it should be Crowe Clark Whitehill. The company mentioned in the reply does not exist.
Secondly Crowe Clark Whitehill has not approved this site's promotion. They did approve a promotion by a company with the same name in 2012, as the current site now rather sneakily points out. This was under a different set of rules as set out by the then FSA (now the FCA). Since then the site has changed and is now run by a company of the same name, incorporated in the Cayman Islands and run out of London. It has no approval from any UK authorised FCA accredited company - according to the FCA Register. This is why we sent the notification to the FCA in the first instance.
All the information is on the FCA's own register so it shouldnt have been too difficult to check it. Clearly for this particular employee, it was.

It doesnt bode too well for the future if they cant get something this simple right. 

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