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The UK's Financial Conduct Authority (FCA) has responded to a cross-party report that called for the agency to be reformed, if not abolished, due to failures in areas such as fraud prevention and whistleblower protection.

Speaking with ���������, an FCA spokesperson said the report does not offer an accurate picture of the agency, its internal culture or its performance across key indicators.

“We sympathise with those who have lost out as a result of wrongdoing in financial services,” said the FCA. “However, we strongly reject the report’s characterisation of the organisation.

“We have learned from historic issues and transformed as an organisation so we can deliver for consumers, the market and the wider economy."

Last month, as covered by ���ĺ�������, a report from the All-Party Parliamentary Group (APPG) on Investment Fraud and Fairer Financial Services called for root-and-branch reform of the FCA, including replacement of its senior leadership.

The report was based on 174 written responses from “people who have had cause to interact with the FCA other than in the course of business”.

These include alleged victims of fraud and financial crime, alleged industry and FCA whistleblowers, and persons representing small and medium-sized enterprises (SMEs).

The report accused the FCA of failing to protect consumers from fraud, failing to act on the financial intelligence it receives and failing to protect whistleblowers who come forward with information.

“The FCA is seen as incompetent at best, dishonest at worst,” said the APPG. “Its actions are slow and inadequate, its leaders opaque and unaccountable.”

The APPG called for an “urgent and energetic” response from the FCA to address the concerns and recommendations highlighted by the report.

We are making progress on fraud, says FCA

Responding to the report, the FCA noted that fighting fraud and financial crime is a top priority for the regulator, and a key commitment in its latest .

The agency noted that it is already seeing progress in turning the tide against fraud and scams — progress that was not acknowledged in the APPG report.

Between 2021 and 2023, for example, the rate of growth in the number of victims of investment fraud slowed from 28 percent to 4.2 percent.

The FCA said its  tool has been effective in helping to fight fraud at source and educate consumers on how to spot fraud. Last year, 2,158 people who used the tool were warned about potential scams, it said.

Similarly, 2023 was a record year for the FCA in terms of enforcement. The agency charged 21 individuals with financial crime offences — the highest number of any year to date.

Satisfaction among regulated firms

The FCA also objected to the APPG’s claims that financial firms have little to no confidence in the agency.

The agency’s  found that more than three-quarters of regulated firms have a high level of satisfaction with its performance.

Moreover, 85 percent of stakeholders — a sample group that includes consumer groups and politicians — agreed that the FCA is achieving its objective of protecting consumers.

Accountability is 'vital'

Finally, the FCA rejected the APPG’s claims that the regulator is “opaque” and "unaccountable".

Contrary to the impression given by the report, the FCA said that accountability is “vital” to its work, and that it continues to benefit from close scrutiny from lawmakers.

In the last parliament, the FCA provided oral evidence to parliamentary committees 38 times — more than any other regulator.

It also provided 41 written updates to the Treasury Select Committee, the Home Affairs Committee, the Science and Technology Committee and the House of Lords.

'Dismayed' APPG member resigns

John Glen, Conservative MP and former economic secretary and City minister, raised similar data points when he  his resignation from the APPG last week.

Glen, who joined the APPG in July this year, said he was not involved in the report and was “dismayed” by some of its claims and the "sensationalist" headlines that followed.

“Fusing the gripes of anonymous embittered current and former employees, some of whom will have been resistant to the ongoing transformation programme, will not help move the focus of the organisation,” he said.

“It is for the FCA to address the criticisms of dissatisfied consumers, but what is needed more than anything now is a much deeper conversation between the regulator, parliament and government about what risk appetite we are prepared to tolerate.”

Glen said the FCA is currently caught between contradictory calls for less red tape and ever-higher standards of consumer protection.

He said the agency cannot have both, and that stakeholders must recognise that trade-offs have to be made.

The MP called for an end to the “cycle of grievance” and a new focus on how the UK can enable its world renown financial services industry to prosper.