FCA can now swiftly cancel regulated firms' activities

The regulator will provide a company with two warnings if it believes it’s not using its regulatory permission. The FCA will be able to cancel the permissions, or change them, 28 days after the first warning if the company has not taken appropriate action. 

This new power is available following a change in the law allowing the FCA to streamline and shorten the removals process. 

The new process will allow the regulator to act quickly when cancelling a firm’s permission when it’s no longer required, as well as to be able to swiftly respond to inappropriate uses of permission. 

Where a firm fails to pay its regulatory fees, submit returns or complete annual declarations, the FCA may view these as indicators of a lack of regulated activity which, in turn, may lead to permission being removed through the use of this new power.

The new power supports the FCA’s existing “use it or lose it” initiative, which has seen the FCA carry out 1,090 assessments since May 2021 to see whether firms are undertaking the financial activity for which they have permission. 

Commenting on this news, the regulator’s executive director of enforcement and market oversight Mark Steward said: “These new powers will enable us to take quicker action to cancel permissions that are not used or needed. 

“Firms should regularly review their permissions, ensure they are correct, and they are acting in accordance with them. If they are not needed or used, they should seek to cancel them.”