The chair of the Financial Conduct Authority (FCA) Charles Randell has promised to “transform” the regulator in the wake of three separate financial scandals, independent reviews of which are set to be completed soon and are expected to provide “difficult food for thought” on its past failures.
Speaking at the FCA's annual public meeting on Thursday (24 September) Randell confirmed the completion of reviews into the collapse of London Capital & Finance, the Connaught fund scandal and the mis-selling of interest rate hedging products is expected between October and "early next year", with the regulator having faced fierce scrutiny over its handling of all three in recent years.
It follows similar comments from outgoing chief executive of the FCA Chris Woolard, who earlier this week (21 September) said the regulator was set for some "painful lessons" in reviews of the regulatory system this autumn.
Asked if the FCA was "ashamed" for allowing LCF to continue to operate, despite knowing they had previously been caught mis-selling financial products, without imposing strict sanctions and close monitoring and surveillance, Randell acknowledged that victims of the scandal wanted "action" and "not sympathy".
He said Dame Elizabeth Gloster's review of the case "is nearing its end", and when it is received "it will give us a great deal of very difficult food for thought and we will react to it."
The chairman added: "The facts that she finds…we will study and we will act upon"
Randell also admitted that the regulator is "disappointed with our own ability to respond to these reviews", which have previously been held up by "delays in the production of documents… largely caused by the current state of our own technology systems".
He told stakeholders that the FCA is now "investing an enormous amount of money in a multi-year programme… to address the shortcomings of the legacy systems we have to enable us to produce documents more quickly…[and] to handle information and intelligence across the organisation much more efficiently".
Randell said this would allow the FCA to be "a better active regulator in preventing harm".
He added: "I am not satisfied with the way that we have managed to respond to these reviews.
"But the reviews are reaching their conclusion…[and] they will give us extremely valuable information as we move to transform the FCA.
"The difficulties that we have faced on the technical side with the reviews have, of course, been compounded by the coronavirus, which has made it very difficult to coordinate document production but it has also made it quite difficult to schedule interviews for the reviewers."
"All of these things have contributed to some delays, but the delays are not indefinite. There are expected timescales for the production of the reports. And by early next year, I believe we will have had three of them."
Separately, director of enforcement and market oversight Mark Steward said there is a "strong team working full time" on a regulatory investigation into the circumstances that ultimately led to the collapse of Woodford Investment Management.
Steward confirmed the regulator was looking to complete "as soon as possible" on an investigation into the circumstances that led up to the Woodford collapse.
He described the investigation as "a priority matter" for the regulator.