Treasury Committee publishes exchange of letters with FCA

The Treasury Committee has published its request to FCA to provide it with information on key elements of its regulation following Nikhil Rathi’s appearance before it in early March, and FCA’s response.  The questions related to:

  • whether FCA would publish in full the findings from Colleague Voice: FCA replied that it had shared extensive information and continues to progress discussions;
  • what FCA has found in terms of insurers’ practice of outsourcing claims handling, whether incentive structures involved have been leading to poor consumer outcomes and what problems consumers have been facing: FCA noted the duties of insurers under the regulatory regime and particularly under the Consumer Duty, and its recent communications in respect of outsourced claims handling. It is currently monitoring claims outcomes and gathering data on customer support;
  • what work FCA has done looking at claims of fund and investment trust managers about sustainability: FCA explained its current rules and the strategy it is now pursuing, which goes wider than the use of voting rights and voting transparency;
  • updated information on mortgage customers who are or may be in financial difficulty: FCA shared its current data and projections, but said 90% of mortgages exposed to interest rate rises before the end of June 2024 are not expected to become financially stretched;
  • FCA’s role in the resolution and sale of SVB and its current concerns about the banking system: FCA explained how its team had worked urgently and in cooperation with the PRA and other regulators to assess the situation, assess the options and assent to the change of control. Its main current concerns focus on market fragility, resolution frameworks and speed of market developments;
  • FCA’s views and thoughts on the evolving regulation of crypto: FCA’s response included detail on the additional resource it is planning.

Emma Radmore