Committee publication · Correspondence · 6 May 2025
Correspondence from Nikhil Rathi, Chief Executive, FCA, following oral evidence on the 'Work of the Financial Conduct Authority', dated 30 April 2025
From: Treasury Committee
Summary
FCA Chief Executive Nikhil Rathi responds to seven follow-up questions from the Treasury Committee Chair following oral evidence on 30 April 2025. The FCA outlines its consumer research programmes on saving and investment behaviour, public understanding of the FCA's role and regulatory limits, engagement with consumer law firms on motor finance redress, wholesale market risks, legislative priorities including PSR integration and BNPL regulation, complaint handling metrics, and work on financial inclusion for prisoners and ex-prisoners.
Key findings
- FCA publishes Financial Lives survey every 2 years; 2024 results due next month. Only a minority of adults understand that FCA regulation does not guarantee money safety—this proportion declined 2022–2024.
- Consumer awareness of the FCA remains low: less than half of consumers can name it as financial services regulator. 65% had heard of FCA (down from 68% in 2020); confusion exists between FCA, FSCS, and FOS roles.
- FCA Commissioner agreed with FCA decision in 82% of cases in 2023–24 (198 of 242). FCA accepted majority of Commissioner's recommendations; 66 not fully accepted, mostly from one case involving 33 complaints.
- Wholesale market risks assessed as 'highest ever' due to geopolitical uncertainty and trade tensions. FCA reports 'predictable volatility' with record volatility events; recent activity included 76 million transaction reports in single day (7 April).
- FCA legislative priorities: PSR folding into FCA, ESG ratings perimeter, BNPL regulation, non-financial spread-betting, Consumer Credit Act reform. FCA met Treasury on perimeter priorities in March 2025.
Tone
FactualTopics
Key actors
Nikhil Rathi, Dame Meg Hillier MP, HM Treasury, Financial Ombudsman Service, Citizens Advice, Financial Regulators Complaints Commissioner, Thinks Insight & Strategy, Economic Secretary to the Treasury
Notable line
“… only a minority of adults understood that saving or investing money with a firm regulated by the FCA did not mean their money was safe - this number reduced in 2024 compared with”
Key Quotes
“Wholesale markets face heightened risks due to increased geopolitical uncertainty and increasing global trade tensions.”
“… we are now in an era of "predictable volatility", with record numbers of volatility events in recent years.”
“… the Commissioner agrees with the majority of the FCA's decisions, and we agree with the majority of the Commissioner's recommendations.”
“… there is a lack of detailed understanding about what the FCA does and does not do.”
“Our perimeter is set by Parliament and requires the Treasury to make legislative changes.”
Source · parliament.uk record ↗