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FCA: be more 'honest' before we take action

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FCA: be more 'honest' before we take action

Financial businesses which discover staff wrongdoing should be ready to surrender regulatory permissions and offer redress before the regulator takes action, a consultation paper has suggested.

In a paper on its mission philosophy submitted for public feedback, the Financial Conduct Authority suggested that regulated businesses should take the initiative when they discover evidence they have failed clients, without waiting for the result of an official investigation.   

‘Firms that take action to address harm caused by serious misconduct demonstrate integrity,’ the FCA wrote. ‘Honest action in response to wrongdoing, especially where consumers may have suffered losses, builds trust and confidence and helps our markets operate well.

‘Firms and individuals should not wait for an investigation to end before acting in a way they think is right. We encourage firms and individuals to examine their own affairs and, where appropriate, take their own remedial action.

‘This includes putting right any harm or damage that may have been caused to consumers or agreeing to vary permissions.’

The FCA emphasised that voluntary action would not pre-empt any formal investigation but would be considered as mitigating evidence when setting penalties.

The Our Approach to Enforcement  and Our Approach to Supervision papers will remain open for consultation on the FCA website until 21 June 2018 and will be published in finalised form toward the end of the year.

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