It has destroyed confidence with the imposition of ever-evolving obstruction of regulated firms, entrepreneurs and investors with new layers of red tape under the wide ranging and conveniently loose interpretation of the Financial Services and Markets Act 2000 (FSMA), and its EU cousin the Markets in Financial Instruments Directive (MiFID) I and II.
This matters, because firms quoted on the LSE generate wealth, create employment, pay pensions, make tax contributions, and contribute to the economic growth of the country. Democracy, in the end, must be paid for.
At a national level politicians know that the demands being made of them by an expectant public are insufficiently funded by our current income.
Ironically, Labour’s Rachel Reeves, the chancellor “in waiting”, is currently campaigning to convince people that she can be trusted on the economy – yet it was the legacy of her New Labour forebears that mutilated that same economy by vast amounts of legislation.
The FSA was “abolished” post the financial crisis, but it was seamlessly replaced with the FCA and PRA in what seemed more like a reshuffle of activities and a corporate rebrand.
The FCA states that its role and objectives are primarily defined by the FSMA and that it is accountable to the Treasury and to Parliament; it claims that its strategic objective is to “make sure relevant markets function well”. But if the ever-diminishing capital value and relevance of the LSE is a metric of “functioning well”, it already fell at the first hurdle many years ago.
The Government has finally spotted this and added, since 2023, a secondary objective of “facilitating, subject to aligning with relevant international standards, the international competitiveness and growth of the economy of the United Kingdom… and its growth in the medium to long term”.
As anyone knows, muddled top-level objectives that contradict one another is a recipe for further confusion and certain failure. Unless radical and unlikely changes happen soon, the secondary objective is a mirage. It has arguably already failed.
