Question to the HM Treasury:

To ask Her Majesty's Government what investigations they have initiated into the authorisation by the Financial Conduct Authority for London Capital and Finance to offer ISA investments.

On 1 April, the Economic Secretary announced that he will use powers under the Financial Services Act 2012 to direct the Financial Conduct Authority (FCA) to launch an investigation into the events at London Capital & Finance and the circumstances surrounding them. This followed a request from the FCA Chair, Charles Randell, to the Economic Secretary to launch such an investigation.

Approval to act as an ISA manager is granted by Her Majesty’s Revenue and Customs (HMRC). When considering an application, HMRC undertakes checks to ensure that applicants hold the appropriate regulatory permissions from the FCA.

Once approval is granted, ISA managers must administer the ISA scheme in accordance with the ISA legislation. HMRC has a range of powers to tackle non-compliance with the rules, including withdrawing permission to act as an ISA manager, voiding non-compliant ISAs and reclaiming any incorrectly paid tax relief.