The Financial Conduct Authority (FCA) has saiD it has blocked nearly 30% more companies from operating over the past 12 months than in the previous year.
The regulator said it had cancelled the authorisation of 627 firms in the year to the end of March.
The FCA said the proportion of firms it did not authorise in 2022/23 was one in four – a rise from one in five in 2021/22 and one in 14 in 2020/21. The report also shows that the regulator handed out £216m in financial penalties. Its actions have delivered £17 for every £1 spent and won consumers some £47m in redress. The watchdog issued 1,882 alerts last year, a 34% increase on the year before, while 8,582 financial promotions were withdrawn or amended, with 14 times more than the year before.
Ashley Alder, Chair of the FCA, said “Maintaining high standards is key to supporting growth. We are helping firms test their innovative products, guiding firms through the authorisation process and are supporting a range of supply and demand-side market reforms. On the 31 July, the new Consumer Duty will raise the bar for retail financial services and place good consumer outcomes at the heart of everything they do.”
Nikhil Rathi, Chief Executive of the FCA said “The FCA has evolved into a more proactive, assertive and data-led regulator better equipped to face challenges like the rising cost of living in a more agile and effective way. Tailored support is important for those struggling with debt and we continue to work with firms to make sure people receive the right help to manage their finances, especially with the rising cost of living.”
The FCA says it has made significant progress in the first 12 months of its strategy, including reducing and preventing serious harm:
- Scanning 100,000 websites a day looking for unlawful activity and protecting the public from over 8,500 potentially misleading adverts in 2022, 14 times more than in 2021.
- Imposing financial penalties of £215.8 million. Following a trial in early 2023, 3 individuals were imprisoned for a binary option fraud. The FCA started prosecutions into alleged market manipulation, money laundering, insider dealing and investment fraud.
- Working with other law enforcement agencies to intervene against illegal crypto activity, including acting against crypto ATMs operating without FCA authorisation.
Setting and testing higher standards:
- Finalising the rules for the Consumer Duty, which come into effect at the end of July, firing the starting gun on the most far-reaching consumer protection intervention for decades that places consumers at the heart of retail financial services.
- Introducing stronger rules to help tackle misleading adverts that encourage investing in high-risk products and helping less experienced investors make well-informed decisions and avoid unaffordable risk through its £11 million InvestSmart campaign.
Promoting competition and positive change:
- Proposing new listing rules to make sure the UK remains an attractive place to invest and make it easier for more companies to join the market quicker.
- Bringing down the authorisations caseload by 60% from a peak of 12,500 cases in December 2021 to 5,500 as of the end of March 2023, allowing more firms to offer services across the financial sector. This dovetails with continued scrutiny of applications, with 1 in 4 rejected or withdrawn for not being good enough.
- Working hand in hand with 870 firms to date to test drive cutting edge products for consumers through the world-leading Regulatory Sandbox and Innovation
- Pathways, helping the rubber to hit the road for a wide range of innovative products.
- Making sure over 300 firms hit the ground running with high standards and maintain them through the Early and High Growth oversight programme, helping firms to meet industry standards so they can grow successfully and nip in the bud any potential issues down the road.
