The FCA publishes data on consumer investment and sets goals by 2025
British financial supervision has published data on consumer investment and set its goals for the coming years. FCA will consider changes to regulations and will try to dissuade people from risky products.
The presented data, related to retail investors, covers April 1, 2020, to March 31, 2021. At that time, FCA:
- opened 1,715 cases related to fraud or venture capital, of which 1,465 investigations were closed,
- published a warning against 1,317 companies and persons running unregistered activities (almost a two-fold increase compared to the data from 2 years ago),
- prevented 48 companies from entering the market, which could have led to potential harm to consumers,
- has received more than 30,000 reports of suspicious or unauthorised companies, directed by customers, the police or other government agencies from home and abroad.
FCA’s actions resulted in a return of around £ 21.7m and a further £ 7m freeze pending a court decision. As of March 31, the regulator has handled 180 criminal cases, which it expects to close by the end of the year.
FCA plans until 2025
The Financial Conduct Authority plans to strengthen market supervision and reduce investor losses. By 2025, the regulator intends to:
- reduce by 20% the number of consumers who could gain in the market but are losing (FCA notes that almost 8.6 million Britons have more than £ 10,000 in investments),
- halve the number of consumers who enter high-risk investments – the FCA noted that their percentage increased by 6% during the pandemic, while as many as 45% of investors say they are unaware of the risks
- halve the number of consumers who enter high-risk investments – The FCA noted that their percentage increased by 6% during the pandemic, while as many as 45% of investors say they are unaware of the risk,
- reduce the number of losses incurred by consumers from investment fraud – in the 2020/21 season; it was 570 million pounds (3 times more than in 2018),
- stabilise a fund that pays financial services compensation, which is to attract £833 million.
To achieve the intended results of the FCA:
- will investigate the introduction of potential changes in regulations,
- will allocate GBP 11 million to a social campaign warning against high-risk investments,
- will improve its ability to detect fraud,
- will strengthen the system that includes financial advisers,
- improve the system related to investment promotion, tightening the requirements for companies and segmenting the high-risk investment market,
- will review the legal framework for financial compensation, reducing costs.