THE financial watchdog has told banks they are failing to meet standards on selling complex investment products and may have to compensate some customers, signalling that enforcement action could be on the cards.
The Financial Conduct Authority (FCA) published a review of structured products which are created by banks and range from alternatives to cash deposits to complex investments linked to multiple financial assets or indices.
Regulators released guidance in 2012 to improve standards in a market European Union regulators estimated at £43bn in Britain at the time.
“Our review found some firms are falling below the standards we expect in their approach to the design, manufacture, packaging and distribution of structured products,” the review said.
The UK Structured Products Association, a trade body whose members include banks and others who create and sell the products, had no comment.
All the firms that were assessed will be asked to explain how they will ensure that customers are treated fairly when offering them new products, the FCA said.
Some firms have been asked to determine if customers have been harmed by existing products. “It is possible that this will result in further remediation work by these firms and could lead to redress for some customers,” the FCA said.