Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what steps she is taking to implement the recommendations of Dame Elizabeth Gloster's report entitled Report of the Independent Investigation into the Financial Conduct Authority’s Regulation of London Capital & Finance plc, published on 23 November 2020.

Dame Elizabeth Gloster made four recommendations to the government, which were all accepted.

She recommended that the government review the allocation of ISA-related responsibilities between the Financial Conduct Authority (FCA) and HMRC. As announced in the government’s response to Dame Elizabeth’s report, HMRC and the FCA established an ISA Intelligence Working Group, which led to strengthened communication and information sharing between the two organisations.

HMRC has also increased the level of compliance checks that it carries out on ISA products and managers. The government is also exploring whether the penalties regime for ISA managers is sufficiently robust to deter breaches of the ISA regulations.

Dame Elizabeth recommended that the Treasury should consider whether Article 4 of MiFID or section 85 of FSMA should be extended to non-transferable securities. The government has legislated via the Public Offers and Admissions to Trading Regulations 2024 to bring previously unregulated non-transferrable debt securities, including minibonds, within scope of the new UK Prospectus regime. The FCA has published its final rules, and the new regime will commence in January 2026.

She recommended that the Treasury and other relevant Government bodies should work with the FCA to ensure that the legislative framework enables the FCA to intervene promptly and effectively in the marketing and sale through technology platforms, and unregulated intermediaries, of speculative illiquid securities and similar retail products. The government and the FCA have taken action to strengthen the regulatory regime for financial promotions, including for high-risk investments. In addition, under the Online Safety Act 2023, large internet platforms will be required to put in place systems and controls to avoid fraudulent advertising appearing on those platforms.

Finally, Dame Elizabeth recommended that the Treasury should consider the optimal scope of the FCA’s remit, recognising the broad range of responsibilities that it has. The government remains of the view that the UK’s financial regulatory framework – where the FCA has a strategic objective to ensure that relevant markets function well – is appropriate and functioning well. The government welcomes the steps that the FCA took to address Dame Elizabeth’s recommendations, and in particular the reform programme that it implemented in order to reflect and manage its wide remit.

The government engages regularly with the FCA on issues relating to its regulatory perimeter and remit. Since 2021, the Economic Secretary to the Treasury (EST) has held a regular Perimeter Meeting with the FCA CEO to discuss the FCA’s Perimeter Report. The most recent meeting was on 24 March 2025. The minutes of these meetings are published and can be found at https://www.gov.uk/government/collections/hm-treasury-and-financial-conduct-authority-regulatory-perimeter-meetings

The FCA also accepted all of Dame Elizabeth’s recommendations addressed to it, and has made significant changes as a result, including undertaking a comprehensive transformation programme to improve its practices and operational efficiency. The government and the FCA continue to work together closely to ensure that financial services are well regulated, and to address risks to consumers.