COMMONS

Investigation "cannot be kicked into the long grass", says Chair

23 May 2019

Following a request from the Treasury Committee, HM Treasury stated that it would direct the Financial Conduct Authority (FCA) on 1 April to conduct a statutory investigation into the possible regulatory failure surrounding London Capital and Finance (LC&F).

LC&F went into administration in January 2019 after taking £236 million of investor’s money. This followed concerns raised by the FCA in December 2018.

HM Treasury has today announced that it has approved the FCA’s appointment of Dame Elizabeth Gloster to lead the investigation, and provided the direction for the investigation to commence.

HM Treasury has also announced its own review of ‘the regulation and marketing of the kinds of retail investment products issued by LC&F’.

Chair's comments

Commenting on the announcement, Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, said:

“Following calls from the Treasury Committee for the FCA to launch an investigation into events surrounding the failure of LC&F, HM Treasury’s decision to direct the FCA to commission an independent investigation was welcome.

“Investors will want answers urgently, and may be surprised by the 12 month deadline for the investigation to conclude.

“This cannot be kicked into the long grass. The FCA, HM Treasury and Dame Elizabeth must think innovatively about how the investigation can report quickly.

“As the SFO is also investigating events surrounding LC&F, innovative solutions will also be needed to ensure that there is maximum transparency.

“Additionally, HM Treasury will look at the wider questions raised by the failure of LC&F, including the regulation of so-called mini-bonds. The Committee will also keep a close eye on this work, which must similarly be conducted in a swift and transparent manner.”

Further information

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