The Financial Conduct Authority says it will contact firms that do not use their regulatory permissions and is prepared to cancel them.
The FCA reinforced its position on unused regulatory permissions in a document today, justifying the information it requests in its retail mediation activities returns.
The regulator says some of the information it requests lets it work out which firms are not earning income from activities demanding permissions.
The statement says: “A firm’s statement that it has not generated any income from regulated activities suggests to us that the firm holds permissions which it is not using.
“If a firm reports ‘0’ we may contact it to find out why and discuss its future plans. If we feel the firm will not use its permissions in the future, then FSMA gives us the power to remove those permissions.”
The regulator says it will pay “particular attention” to investment firms that do not use permissions for a year.
However, the FCA will also oversee how firms use permissions in other areas of financial services, including mortgages.
It says: “We will write to firms requesting them to remove their permissions and we will continue to monitor the alerts generated by mortgage and general insurance firms.”
The regulator also explained why it collects certain sorts of data from financial firms, why it asks for it through its Gabriel website and how that data informs its supervision.
The FCA says the data lets it spot trends, allocate its supervision to the firms that need it most, better understand markets and identify risks to consumers.