The Financial Conduct Authority (FCA) is set to use new powers to be able to swiftly cancel or change what regulated activities companies are permitted to do.
According to the FCA, this new power is available following a change in the law allowing the FCA to streamline and shorten the removals process.
The authority claims it will provide a firm with two warnings if it believes it is not using its regulatory permission. If the company has not taken relevant action, the FCA will be then be able to cancel the permission or change it, 28 days after the first warning.
The FCA said this move will strengthen consumer protection by cutting the risk of consumers misunderstanding or being misled about their exposure to financial risk and how much consumer protection they have.
The new process will also enable the FCA to act quickly when cancelling a company’s permission when it is no longer required and to swiftly respond to inappropriate uses of permission.
When a company fails to pay its regulatory fees, submit returns or complete annual declarations, the FCA may view these as indicators of a lack of regulated activity – which may lead to permission being removed through the use of this new power.
FCA executive director of enforcement and market oversight Mark Steward said, “Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed. Firms should regularly review their permissions, ensure they are correct, and they are acting in accordance with them. If they are not needed or used, they should seek to cancel them.”
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