On 18 May 2021 the FCA published a speech by Mark Steward (FCA Executive Director of Enforcement and Market Oversight) entitled The rise in scams and the threat to a legitimate financial services industry.

Highlights in the speech include:

  • The FCA has a substantial role to play in preventing harm to consumers from unauthorised activities and it has made improvements to address scams as they are happening.
  • While the FCA does have statutory power over the use of false or misleading statements in relation to securities, those offences will not bite where the investment product is outside the financial promotions perimeter. The perimeter, or perimeters (there is more than one), is an intricate boundary that can produce different results in terms of regulatory power, consumer protection and outcome, depending on some equally technical distinctions. Despite these circumstances, the FCA remains very active and engaged in tackling the scourge of investment fraud in this country.
  • However, firms should be doing more to prevent harm also and regulated firms who let down their guard, especially in assisting firms on the FCA’s Warning List, may well face action from the regulator for doing so as well.
  • The FCA continues to engage with online platforms to ensure harm is prevented.
  • The FCA is engaging with social media firms about the change to the law which requires them, for the first time, to comply with section 21 of the Financial Services and Markets Act 2000 when providing any value adding services. The initial engagement has been encouraging.