An All Party Parliamentary Group (APGG) of UK MPs have branded the FCA as 'incompetent at best, dishonest at worst', in a hard-hitting report that calls for wholesale reforms at the financial watchdog.
The APPG on Investment Fraud and Fairer Finance is presenting its report to Parliament after collecting evidence from 175 respondents, including whistleblowers, victims of scams and current and former employees of the regulator.
The Call for Evidence came about because of widespread criticism of the regulator from a range of independent sources, including external reports on the poor handling of the London Capital & Finance, Connaught, Interest Rate Hedging Product and British Steel Pension Scheme scandals.
Bob Blackman CBE MP, co-chairman of the All-Party Parliamentary Group (APPG), comments: "The FCA responded to the excoriating criticism it received about its poor performance by launching a Transformation Programme. Unfortunately, the testimony received by the APPG in response to its Call for Evidence indicates that this programme has been a failure."
Some of the most damaging testimony comes from current and former employees who said the regulator had a “defective culture” in which “errors and inaction" were "too common”.
A former FCA employee told the parliamentary group they had experienced "the worst staff culture I have ever experienced in nearly 40 years".
Others complained of a bullying culture, in which those raising challenging questions were discriminated against and sidelined.
APPG member the Lord Sikka comments: “The APPG’s report on the Financial Conduct Authority pulls no punches; and rightly so. It’s a justifiably hard-hitting critique of the regulator; a regulator that I have been convinced for quite some time to not be fit for purpose. The FCA is complacent, conflicted and captured; and without a major overhaul it will never deliver on the responsibilities Parliament has given it to protect consumers."
Among other reforms, the APPG has called for the establishmkent of a supervisory council to review the FCA's effectiveness, along with a change in funding and an overhaul of the way the FCA's leadership team is appointed.
In reposonse, the FCA states: "We strongly reject the characterisation of the organisation. We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy.”