Shutterstock.
News Alternative Lending Digital Banking Crypto Savings And Investment
FCA investigated by the National Audit Office
The investigation comes as the regulator’s responsibilities expand to include crypto, AI and online fraud.
The National Audit Authority (NAO) is launching an investigation into the City’s financial regulator to monitor its effectiveness as its list of responsibilities grows.
The review is set to look into the Financial Conduct Authority (FCA)’s governance, strategy and culture as it introduces oversight over online fraud, crypto and the burgeoning artificial intelligence space.
An FCA spokesperson said the watchdog welcomes the review and that it has a “clear strategy” about what it wants to be, adding that it is “well under way” to getting there.
With a number of new changes recently introduced and proposed, including the Future Regulatory Framework and the upcoming Consumer Duty, the NAO will be examining how the FCA copes with change and is working with other financial bodies, particularly HM Treasury.
“At a time when financial crime, particularly, remains a pertinent global issue, keeping up with the pace of change should be a top priority [for the FCA],” Encompass Corporation global head of regulatory affairs Dr Henry Balani said.
“This review represents a step forward and will help the FCA to fine tune its processes, improving operations and ensuring it is fully prepared to assist businesses in navigating an increasingly complex regulatory landscape.”
The NAO last audited the FCA in 2014, which looked at the creation of the FCA one year on.
In a very different financial landscape to that of 10 years ago, the FCA has now been tasked with ensuring crypto companies comply with money laundering rules.
“The FCA plays a crucial role in enabling the financial services industry to operate to the highest standards, but that shouldn’t mean that the regulator is above scrutiny,” DKK Partners co-founder Khalid Talukder said.
By October it will also be tasked with monitoring advertising related to crypto, and its responsibilities over the alternative assets space could expand based on government decisions on how to regulate the sector.
“Working with the NAO will enable the FCA to initiate an independent review of its policies, procedures, and operational effectiveness, which is long overdue.
“Having a regulator fully equipped to serve a dynamic market with the use of AI and digital currencies surging is in all our interests, and we welcome this announcement as a positive step forward for the industry.”
Companies In This Article
