The British Financial Conduct Authority (FCA) has summarized its regulatory actions in 2022, highlighting the newest three-year strategy: an increased number of enforcement actions and the employment of 1,000 new officers to better protect consumers from financial harm.
Responding to its strategy published in April, the FCA stepped up its efforts and has removed or changed the content of more than 8,000 potentially misleading advertisements. Additionally, it revoked the licenses of 201 firms that failed to meet regulatory standards.
FCA Takes Aim at Potential Fraudsters Across Financial Markets
In addition, the FCA published 1,800 warnings about potential fraudsters in the financial markets. Thanks to the higher 2022 statistics compared to the year earlier, the FCA managed to recover £30 million belonging to investors and prevented the loss of another £7 million.
"This has been a difficult year for many people who have been struggling with the cost of living. So it is all the more important that financial companies meet our standards and treat their customers fairly, particularly those who are facing financial difficulties," Nikhil Rathi, the Chief Executive of the FCA, said.
The FCA has hired more than 1,000 'new colleagues', opened an office in Leeds and accelerated its expansion in Edinburgh. According to the FCA's statement, these steps were vital to improve 2022 statistics and to continue current work on reforms supporting competitiveness and security in the UK financial market.
FCA Takes Many Steps to Protect Retail Investors
Throughout 2022, the financial watchdog has taken many initiatives to reduce financial losses for retail investors. In May, it published a warning related to the risks of investing in cryptocurrencies and the inappropriate promotion of digital assets on social media.
The topic of rogue financial ads resurfaced in early December when the FCA took steps to combat misleading, fraudulent and illegal marketing activities. In 2022, the number of poorly composed promotional campaigns was four times higher than the year before.
On top of that, the regulator drew attention to "poor practices" among contracts for difference (CFDs) brokers, reminding them that CFDs are high-risk assets. As a result, the regulator sent a 'Dear CEO' letter to representatives of trading companies licensed in the UK to draw their attention to pay special attention to the quality of their services.
The FCA issued a separate warning addressed to developers of mobile trading apps, focusing on the excessive 'gamification' of retail trading. According to the financial watchdog, it can lead to overtrading and, consequently, excessive loss.
