The City watchdog has been warned that it is failing to give financial firms a clear idea of how to prepare for Brexit with fewer than a fifth of respondents to a survey saying it was doing a good job.
Only 14 per cent of more than 2,000 regulated businesses responding to the survey commissioned by the regulator on its recent performance said that the FCA was doing a good job of explaining its preparation work for Britain’s withdrawal from the EU.
By contrast, 33 per cent of respondents disagreed when asked whether the FCA was doing a good job on Brexit, while the majority, 53 per cent, were equivocal, saying they neither agreed nor disagreed.
“Only a small minority of firms feel that the FCA is communicating effectively on the process of preparing to exit the EU,” the regulator said.
The survey was carried out on behalf of the FCA and its practitioner panel by Kantar Public and 10,026 firms were invited to take part, of which 2,080 completed the questionnaire.
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Practitioners said that the FCA had to get to grips with the problem of how to explain Brexit and recommended more direct contact between officials and the industry.
“Clearly there is more work to be done in this area and the panel is encouraging the FCA to communicate directly with firms on an ongoing basis, even though specific details of post-Brexit regulation may not yet be clear and the message is that firms should continue, as far as they can, with business as usual,” the panel said.
The survey result comes despite the FCA putting aside £2.5 million for Brexit-related work and hiring a team of lawyers to work on getting the UK financial markets ready for a post-Brexit world.
Individual responses to the survey showed a variety of priorities among firms, with 13 per cent saying that the FCA should concentrate on minimising the disruption of EU withdrawal, while 12 per cent asked for clear guidance on new rules and changes to regulation.
A further 11 per cent said that the British market should remain attractive and competitive and 10 per cent put protecting consumer confidence at the top of the regulator’s Brexit agenda.
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Priorities differed depending on which sector the firm was operating in, with 11 per cent of asset managers saying that maintaining and improving EU “passporting” rights — the ability to provide services anywhere in the EU — was the most important issue, compared with 4 per cent among all firms.
Overall, 60 per cent of respondents said they had confidence that the FCA was delivering a competitive market, up from 56 per cent last year, while 79 per cent said that the regulator was helping the financial system to function well, up from 74 per cent a year ago.
António Simões, head of HSBC in the UK and Europe and chairman of the panel, said that he was encouraged by the survey’s results, despite the downbeat assessment of the FCA’s work on Brexit.
“The panel will continue to work with the FCA to address the issues raised in the survey about communication, volume of regulation and the challenges of Brexit,” he said.
Simon Morris, a partner at CMS, the law firm, said the FCA’s survey had drawn “some remarkably candid responses” from the City but warned that it “glosses over areas of conflict”.
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“Next year the FCA should ask firms that have experienced supervisory intervention or enforcement action whether the FCA has acted consistently and transparently, and whether they feel they have been treated fairly. The FCA may be surprised by the response,” Mr Morris said.
Andrew Bailey, chief executive of the FCA, said the survey showed that there were areas in which the regulator could do better and had identified a number of areas for improvement. “We know that we can always do better and the survey is very helpful,” he said.