The Financial Conduct Authority (FCA) has “deep cultural problems,” a senior U.K. lawmaker Andrew Tyrie said after the regulator responded to parliamentary criticism of how it handled a newspaper article that sent shares in insurance companies tumbling.
The FCA will change how it deals with price-sensitive information and will no longer use the media to publish announcements without also issuing its own official statement, the agency said in a response released by the House of Commons Treasury Committee, which is chaired by the Conservative lawmaker.
The regulator, reformed two years ago following a string of scandals, was attacked by lawmakers and insurance companies for taking several hours to clarify a 2014 Daily Telegraph article saying it would review 30 million life-insurance policies. U.K. insurers had as much as $4.2 billion wiped off their shares. The article was based on private briefing with journalists.
“The FCA made a serious error in March last year,” Tyrie said. “It created a false market in life insurance shares. In doing so it put its own statutory objectives at risk.”
The FCA also said it would hold an external review every other year into the performance of its board, and that it would make improvements to its crisis management procedure.
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