The Financial Conduct Authority should pay compensation to individuals when it makes regulatory blunders, the Transparency Task Force (TTF) has recommended.

The TTF wants sweeping reform to ‘fix’ the FCA and a new statutory duty of care for the FCA, backed by a right to sue the regulator.

The TTF, a group set up in 2015 to campaign for better regulation, outlined its recommendations this week when announcing its ‘Plans and Priorities for 2023.’

The group will campaign this year under the banner: “Fixing the FCA”.

Among its key recommendations for the FCA are:

• Obliging the regulator to compensate individuals who lose money as a result of it failing to perform its functions, and provide redress to those who’ve suffered from its historic failings;
• Introducing a statutory duty of care to be owed by financial services firms to consumers, backed by a right to sue;
• Create an oversight body, based on one introduced recently in Australia, charged with ensuring the FCA acts in consumers’ interests 

The TTF says the new requirements could be introduced in the Financial Services and Markets Bill currently going through Parliament.

TTF found Andy Agathangelou said: “‘It’s absolutely vital that the UK’s Financial Services sector is one that people and institutions can have trust and confidence in. For that to happen we need an effective conduct regulator, but all the evidence suggests the Financial Conduct Authority is consistently failing to provide the consumer protection Parliament requires of it on behalf of the British public.”

At the launch for its new campaign Mr Agathangelou referred to the damning reports by Dame Elizabeth Gloster on LC&F, Raj Parker on Connaught, John Swift KC on IRHP mis-selling, the Work and Pensions Select Committee’s investigation into Pension Scams and the reports by the National Audit Office and the Public Accounts Committee on the British Steel Pensions Scheme debacle. 

Mr Agathangelou said: “Taken individually, those reports show there are problems at the FCA, but when you consider them as a whole you must conclude the issues the FCA has are so serious and deep-rooted that it desperately needs fixing or replacing. The FCA is obviously an organisation in distress, and in denial. It’s just not good enough that it can’t be trusted to deliver on its consumer protection remit, not when the FS sector is such an important part of our economy. 

“The Transformation Project has been a missed opportunity because it has failed to deal with the fundamental issues that cause the FCA to under-perform - it has profound cultural, leadership, conflict of interest and governance problems that go beyond innocent incompetence.”

He said the TTFs calls were, “the absolute minimum reforms needed to put the FCA back on a path toward transparency, accountability and acceptable performance of its statutory functions.”