The Financial Conduct Authority (FCA) has been branded “incompetent at best, dishonest at worst” in a new Parliamentarian report.

A group of MPs and Lords have called for an overhaul of the UK’s main financial regulator following years of significant criticism.

The FCA has been subject to blame in recent years from statutory bodies, and in independent reviews commissioned following high-profile regulatory failures, for its inaction to punish alleged wrongdoing.

A new report out today, which has detailed an examination of the FCA that took over two and a half years and collected evidence from 175 fraud victims, whistleblowers and the regulator’s former staff, found that there were “very significant shortcomings” to the regulator.

A former FCA employee told the Financial Times that the regulator had “the worst staff culture I have ever experienced in nearly 40 years”, while another said that “transparency was much talked about but seldom practiced in things that mattered”.

The Parliamentarian report said: “The individuals who generously shared their experiences with us told tragic tales of regulatory failure causing enormous financial and emotional distress.

“The picture painted is not pretty. The FCA is seen as incompetent at best, dishonest at worst. Its actions are slow and inadequate, its leaders opaque and unaccountable.”

Possible reforms put forward in the report, some of which would require legislation, include introducing a no tolerance policy for a lack of integrity, establishing a supervisory council to review the FCA’s effectiveness, changing how the FCA is funded, as well as overhauling the way the regulator’s senior leadership team is appointed.

An FCA spokesperson responded: “We sympathise with those who have lost out as a result of wrongdoing in financial services, however we strongly reject the 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.”

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