National Audit Office to scrutinise FCA as its responsibilities grow

investmentweek.co.uk:

The FCA said it welcomes the National Audit Office’s review.

According to the NAO, the review comes in the wake of the «significant changes» that have been introduced in the way the watchdog is expected to regulate the financial sector. The review is scheduled for winter 2023/24.

«These include the Future Regulatory Framework, a new Consumer Duty for regulated firms and a new proposed statutory secondary objective for the FCA to facilitate the international competitiveness and growth of the UK economy in the medium- to long-term,» it said.

Regulators push back against draft Financial Services Bill

The Treasury Committee has expressed support for the introduction of the promotion of growth as a secondary objective for the regulator, but said it would continue to reject any calls for growth or competitiveness objectives to become a primary objective.

«This would increase any pressure on regulators to trade off competitiveness against resilience, and would undermine the regulators' ability to deliver on their core functions,» it said last year. 

The NAO added that technological innovations, such as cryptoassets and artificial intelligence, provide «challenges and opportunities» for the regulation of financial services.

The financial watchdog was recently tasked with making sure cryptocurrency firms comply with money laundering rules and, by October, it will be responsible for monitoring crypto-related adverts. 

Last week, FCA chief Nikhil Rathi warned banks, investors and insurers should bolster their spending against scammers who are using artificial intelligence for fraudulent activity in the financial services industry, noting the regulator «will take a robust line on this».

FCA boss warns against scammers