The Financial Conduct Authority has admitted that its Financial Services Register is in need of “further improvements” to better protect consumers.
In a written response to a question that was put to the watchdog at its annual public meeting last month, published today (November 16), the FCA said work on the register is ongoing and it expects to have an update on plans for the register in 2023.
The response was made to an accusation that the register “is not fit for purpose” given concerns previously raised by the Financial Regulators Complaints Commissioner.
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Earlier this year, the FCA did not accept that the information provided on its register was misleading and gave investors caught up in a mini-bonds scandal the wrong impression of what they were investing in.
Its response today reiterated this, and said that while the FCA believes the register was not misleading in relation to the regulation of London Capital & Finance, it could have been clearer.
“We have already taken steps to address that,” the FCA said.
It continued: “We want to continue to improve. Our work will be ongoing and iterative. It may involve changing the technology we use. We are also mindful there may be different needs and solutions for different users and audiences, in particular consumers.”
The regulator also pointed out that the register “is a high-volume website” that receives over a million visitors a year, and more than 3,500 visitors on a typical working day.
“We have steadily increased our investment in the register and made a range of incremental changes. That includes improvements to the data and consumer protection messaging.
“Thousands of users provide feedback on the register each year, and about 85 per cent of that is positive. However, the comments we receive show the need for further improvement,” the FCA said.
Pimfa head of public affairs, Simon Harrington agreed that there remain particular areas where the register is not working as well as it could be.
“While it acts as an effective barrier to scams in most cases, it continues to be the case that the sale of unregulated products through the ‘halo effect’ of regulation is not adequately captured by the register,” Harrington said.
“There are high profile examples of the harm that the halo effect has introduced into financial markets previously and it remains a source of disappointment that the FCA has not sought to mitigate this through prominent warnings on its register.”
Earlier this year, the final report into the FCA’s oversight of London Capital & Finance was published and examined the scandal which saw retail investors lose more than £230mn when the firm collapsed in 2019.
LCF was regulated by the FCA, but certain investments it provided were not.