FCA criticised for failure to understand cost of compliance

NAO report says regulation harms innovation

The regulator has come under fire for its lack of understanding of the effect compliance cost has on firms, in a report by the National Audit Office (NAO) out today.

The NAO said the regulator did not know the extent to which its actions incurred costs for financial services firms, particularly smaller ones, which could be affected more heavily. It also said the Financial Conduct Authority's (FCA) actions could hamper innovation by firms, as any new product brought to market could "subsequently be regarded as mis-sold" if they prove to be unsuitable for some consumers. It concluded the regulator had "further to go to show it is achieving value for money". The NAO published a report on 24 February in which it examined the effect of current regul...