MPs blast ‘dysfunctional’ FCA

A schism has opened between the FCA and MPs over a perceived lack of transparency at the regulator following a scathing report into its handling of the closed-book review.

Last month, the Treasury select committee blasted the FCA’s handling of its review into closed-book policies, while the watchdog was also forced to yield on publishing reports on its internal auditing processes. The FCA was criticised for its management of a media briefing that sparked fears of a regulatory clampdown and sent share prices plummeting.

MPs have voiced concerns about the effectiveness of the regulator’s management as a whole, particularly in following up the Davis Report on the media briefing. FCA chief executive Martin Wheatley and chairman John Griffith-Jones have both been singled out for criticism by the TSC.

TSC chairman Andrew Tyrie described the regulator as a dysfunctional organisation and raised questions over “systemic weaknesses” at the FCA.

In a raft of recommendations, the committee called for a review of communications and internal working relationships, how the FCA shares expertise and its approach to managing risk.

In addition, MPs said the regulator should create a ‘responsibilities map’, as is the case for banks, clearly showing where senior responsibility lies.

The TSC says it expects the FCA to publish its findings within six months.

Responding to the report, an FCA spokeswoman says: “The FCA is determined to learn the lessons and ensure that this will never happen again. It will study the committee’s recommendations and respond in due course.”