City watchdog vows to ‘raise its game’ following probe errors 

The City watchdog has admitted it must ‘raise its game’ to become ‘fit for purpose’ after a string of scandals.

Bosses at the Financial Conduct Authority (FCA) said £120million will be invested in improving its data capabilities over the next three years to crack down on fraud and misconduct.

These include strengthening rules on financial promotions to protect investors, improve standards on pension advice and taking a more proactive approach to spot scams and high-risk investments.

Bosses at the Financial Conduct Authority said £120m will be invested in improving its data capabilities over the next three years to crack down on fraud and misconduct

The plans come less than a month after MPs on the Treasury Select Committee said the FCA needed a culture change following the collapse of mini-bond firm London Capital & Finance (LCF). 

LCF went bust in 2019 after raising £237million from 11,000 small investors and a report by Dame Elizabeth Gloster last December found the FCA failed to properly regulate and supervise the business.

In an apparent nod to the report, the FCA said it would be ‘proactive at the boundaries of the perimeter’ of its regulated markets – having previously pointed out the LCF model did not fall under its remit.

The regulator also said it would develop plans to differentiate the UK’s financial institutions from EU ones following the recent revelation from Chancellor Rishi Sunak that attempts to sign a mutual recognition deal with Brussels had failed.

Chief executive Nikhil Rathi said: ‘We know that there are areas where we need to raise our game considerably.

‘The FCA must continue to become a forward-looking, proactive regulator.

‘One that is tough, assertive, confident, decisive, agile. One that is not only purposeful but that is fit for purpose.’

• The FCA is facing criticism after it misplaced 323 electronic devices worth £310,600. It is not clear what information was on the devices and whether anybody suffered as a result. The information was obtained by litigation firm Griffin Law using the Freedom of Information Act.