Andrew Bailey has written to the Treasury Select Committee setting out a summary of the powers “FCA does not have”. It has been asked many questions in the context of the RBS GRG investigation. The letter sets out:
- FCA’s basic remit over regulated activities and its role as the UKLA as well as its powers under other legislation such as the PSRs and its role as competition regulator
- the threshold conditions for authorisation and FCA’s powers over a firm once authorised
- the Principles and how Principles 3, 4 and 11 extend to all of a firm’s activities, not just its regulated activities
- its powers over individuals in controlled functions and how the SMCR is extending responsibility as conduct rules may address conduct related to a firm’s unregulated activities as well as its regulated ones
- where the regulatory perimeter lies, with specific reference to embedded swaps (in the RBS context – and how these products are not regulated but have similar characteristics to IRHPs), crypto-currencies (which are not specified investments themselves, but derivatives referencing them may be), spot fx, pre-paid funeral plans (although the provision of these is a regulated activity, FCA says it does not regulate any provider as they all make use of exclusions), investment consultants, unregulated mortgage purchasers, defined benefit pensions and unregulated introducers
- how FCA wants to create industry standards that go wider than the regulated perimeter, including on the SMCR and commercial lending, particularly to SMEs and
- FCA’s hope that the approach it has set out in its Mission, and the increased powers the SMCR gives it, will allow a firmer foundation for regulatory intervention outside the perimeter than has previously been possible.