LONDON (Reuters) – Britain should not wait for Brexit to bring unregulated financial activities under the Financial Conduct Authority’s umbrella as consumers face “fast paced” risks, a report from lawmakers said on Friday.
The bulk of Britain’s financial regulation comes from the European Union, making it tricky for Britain to make fundamental changes, but the country is due to leave the bloc at the end of October, creating an opportunity for reform.
Parliament’s Treasury Select Committee said its report that the watchdog needs powers to better police the boundary between regulated and unregulated activities and avoid being “reactive” to new threats.
The collapse of London Capital & Finance, an investment firm that sold unregulated “mini bonds”, and consumers putting money into unregulated cryptoassets, has prompted lawmakers to call for speedier changes in how the regulatory “perimeter” is set over time.
“The FCA should be given formal power to recommend to the Treasury changes to the perimeter of regulation, with all recommendations publicly disclosed, providing greater transparency and focus to the process,” the Committee said in a statement.
“The FCA should be given the remit to highlight the potential risks to consumers of an unregulated activity.”
There was no need to wait for Brexit and the finance ministry should bring forward changes as soon as possible, the report added.
One way for the FCA to get on the front foot was to give it powers to request information from unregulated financial firms, the report said.
Earlier this week, the FCA warned consumers that the cryptoassets they were investing in have no “intrinsic value”.
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