The Financial Conduct Authority (FCA) has warned that there are legal limits to its power to combat online scams, despite the success of its recent ScamSmart campaign, which reached four out of five pension holders aged 45-64.
In a letter to Work and Pensions Committee (WPC) chair, Stephen Timms, FCA chief executive, Nikhil Rathi, warned that there are limits to what the FCA can do to tackle online harm under the legal framework within which it works.
For instance, not having the statutory power to investigate fraud and gather evidence from unauthorised firms where there is no FSMA nexus.
He also warned that exemptions in the Financial Promotion Order for High Net Worth (HNW) and Sophisticated Investors are a “significant vulnerability” in the financial promotion regime.
Rathi explained that this exemption allows unauthorised firms to issue financial promotions to HNW and Sophisticated Investors without having to comply…