The Financial Conduct Authority has signalled its intention to move faster to remove unused firm permissions.

The regulator has published a consultation on new powers that would enable it to intervene in the advice market more quickly.

It is part of the FCA’s response to tackle issues raised by Dame Elizabeth Gloster’s review into the regulation of London Capital and Finance.

The FCA will be able to start the cancellation process as soon as it considers permissions are not being used.

Firms concerned will first receive a 14 days’ notice.

The regulator will then have the possibility to vary or cancel permissions after a month.

The consultation will run until 29 October 2021.

This new power is granted to the FCA via the Financial Services Act 2021.

The changes aim to help prevent scams and to ensure the Financial Services Register accurately displays the permissions firms hold.

The FCA said that incorrect or outdated permissions on the register can mislead consumers about the level of protection offered by a firm.

FCA director of enforcement and market oversight Mark Steward said: “We want to use this power to take quicker action to prevent consumers being misled.

“It is part of our transformation and drive to be more assertive, drawing on an innovative approach and using new streamlined processes to make important regulatory interventions.

“Firms can and should apply to have their permissions cancelled if they no longer plan to use them but many fail to do so.

“We understand that business models may evolve over time and there may be valid reasons why regulatory permissions are not being used, but unless firms notify us and keep their permissions up to date, they will risk losing market access.”

The existing cancellations process enable the FCA to cancel permissions to firms that have not used them for 12 months or more.

The FCA has shown its intention to make faster and more effective decisions in the future.

It has recently announced separate changes to its decision-making and governance.

The FCA has already undertaken a “use it or lose it” exercise with firms.

This exercise aimed to remind firms of their obligation to review regulatory permissions and ensure they are up to date or removed if not needed.

CMS partner Simon Morris says: “This is an important housekeeping measure designed to hit two targets. 

“First, many firms’ FCA licences cover business they no longer do, or never did. The FCA wants to prune these so both it and customers can clearly see what the firm actually does.

“Second, a firm that is part or fully dormant should have its licence trimmed accordingly. 

“This is to stop another London Capital, where the firm remained FCA authorised but without any regulated business.”