Emma RadmoreThe National Audit Office has published a report looking at how FCA deals with its new responsibilities and past regulatory failures. The report says FCA is making good progress and has made significant changes, but it needs better to manage the related risks – not least to meet its commitment to reduce and prevent financial crime.
One of the key findings in the report is the delay between FCA identifying an issue and it taking action to address it. Sometimes this is outside FCA’s powers, as is the case with BNPL regulation, but this is not always the case. The report notes that FCA has had the power to require (and has required) crypto-asset firms to comply with the MLRs since January 2020, but only took enforcement action against operators of illegal crypto-ATMs in February 2023.
FCA has been taking action to recruit at senior level and to recruit and train staff with specialist skill sets, but it sometimes struggles to do this, notably in the crypto area.
The report recommends that FCA should ensure it has the operational processes to manage the scale of its planned changes, and that it should look to give greater clarity about its performance to its stakeholders. Finally, the NAO noted the importance of FCA completing its work on optimising its use of data and understanding what its priorities are.