Jan. 15, 2025 Letter from FCA to Treasury Committee
On Jan. 15, 2025, UKP Treasury Committee published letter of Dec. 17, 2024 from FCA on complaints against the FCA relating to the collapse of Collateral (UK) Limited.
Letter updates Committee on how FCA is responding to complaints from investors about whether regulator could have acted in different way to better protect them.
Sets out background, FCA's decision on firm, and what it has changed to enable it to better deal with similar cases in future, FCA recognizes it could have acted better.
Notes its failures to identify changes made to the Interim Permission (IP) Register, had this been done the correct position regarding firm could have been identified earlier.
In addition, FCA says it did not act promptly enough to correct the IP Register, and did not handle complaints it received as well as it should have done, for above reasons is making compensation payments, including for distress and inconvenience.
Improvements since events of Collateral include decommissioning of IP Register when updated Financial Services (FS) Register was launched in Jul. 2020, FS Register now operates differently, with controls on place including on making changes to data.
Data is more closely aligned with Companies House data, cross-referenced more often.
FCA also created a Firm and Individuals Team responsible for monitoring, maintaining and improving quality of all data about firms/individuals displayed on FS Register.
And has undertaken work in Complaints Department to enhance capabilities.
Document dated Jan. 15, 2024, received from UKP Jan. 16, summarized on Jan. 21.
On Dec. 19, UK FCA called on Collateral investors to complain.
UK FCA called on investors in Collateral to come forward so they can receive apology.
Follows UK prosecution of directors who were sentenced to a total of 8 years imprisonment for their role in the fraud in Jul. 2023, see #125980.
Summary
Collateral offered peer-to-peer style investments and its directors fraudulently changed details about the firms’ public entry on the UK FCA’s interim permission register.
Made it look like firm held interim permission to undertake consumer credit activities, which were granted to firms who transferred from the OFT in 2014, when it did not.
When firm applied for full authorization opportunities were missed to identify that firm did not hold valid interim permission and interim permission register was incorrect.
In addition, once the UK FCA had knowledge of the issues, it did not act promptly enough to tell the firm to stop regulated business and to correct the register.
Following an investigation, the UK FCA prosecuted the directors, who were sentenced to a total of 8 years imprisonment for their role in the fraud in Jul. 2023.
Over 300 complaints received from investors on failures when dealing with firm.
These include a failure to maintain the correct information on the register and a failure to alert investors when the regulator became aware of the incorrect information.
UK FCA upheld complaints, apologized, will pay £500 to investors in Collateral in recognition of contribution to distress and inconvenience caused by UK FCA errors.
Further payments of £150 will be made for delays in complaints handling.
For those who haven't yet complained, a dedicated complaint form has been created for these people to provide their details, and they should do so before Mar. 31, 2025.
Jan. 15, 2025 Letter from FCA to Treasury Committee
On Jan. 15, 2025, UKP Treasury Committee published letter of Dec. 17, 2024 from FCA on complaints against the FCA relating to the collapse of Collateral (UK) Limited.
Letter updates Committee on how FCA is responding to complaints from investors about whether regulator could have acted in different way to better protect them.
Sets out background, FCA's decision on firm, and what it has changed to enable it to better deal with similar cases in future, FCA recognizes it could have acted better.
Notes its failures to identify changes made to the Interim Permission (IP) Register, had this been done the correct position regarding firm could have been identified earlier.
In addition, FCA says it did not act promptly enough to correct the IP Register, and did not handle complaints it received as well as it should have done, for above reasons is making compensation payments, including for distress and inconvenience.
Improvements since events of Collateral include decommissioning of IP Register when updated Financial Services (FS) Register was launched in Jul. 2020, FS Register now operates differently, with controls on place including on making changes to data.
Data is more closely aligned with Companies House data, cross-referenced more often.
FCA also created a Firm and Individuals Team responsible for monitoring, maintaining and improving quality of all data about firms/individuals displayed on FS Register.
And has undertaken work in Complaints Department to enhance capabilities.
Document dated Jan. 15, 2024, received from UKP Jan. 16, summarized on Jan. 21.
