‘Part of the criticism we face is justified’, says FCA head
The head of the Financial Conduct Authority (FCA) will say that some criticism of the watchdog is justified in a speech given in the City this evening, and that consumers need to be better warned about the risks related to investment.
Speaking at the Lord Mayor’s City Banquet at Mansion House, Andrew Bailey is expected to say: “part of the criticism we face is justified”.
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The watchdog has faced criticism for its response to a series of financial scandals, including RBS’ Global Restructuring Group and the collapse of London Capital & Finance.
The FCA also recently defended itself after being accused of being “asleep at the wheel” in the run up to the collapse of former star fund manager Neil Woodford’s investment empire.
The regulator said in a policy document last month that retail investors “were not aware of, or did not appear to understand, the liquidity risk to which they were exposed” when they invested in Woodford’s flagship Equity Income Fund.
The fund was suspended in June after becoming overwhelmed by redemption requests, and its closure was announced earlier this month.
“The public needs to receive clear meaningful disclosure on the risks they are taking,” Bailey will tell guests at the dinner.
“We want to see more transparency in the risks of non-bank investment so that investors get useful information.”
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He is also expected to say the watchdog must be prepared to “challenge the perimeter” of its regulation and “make clear our views on how the perimeter needs to change”.
The government was criticised recently for refusing to give the FCA the power to recommend changes to its remit after chair Charles Randall warned that regulatory loopholes were being exploited by “bad people”.
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