The actions taken by the Financial Services Authority (FSA) nearly a decade ago delivered redress of £2.2 billion to thousands of small businesses. The FCA welcomes the review’s finding that most customers eligible for the scheme in all likelihood obtained better outcomes than could have been achieved outside of it.

Targeting this scheme so that it could be quickly rolled out to the small businesses that needed it most was a complex undertaking. Nevertheless, the FCA has acknowledged clear shortfalls in processes, governance and record-keeping when decisions about the redress scheme were made, and a lack of transparency.

The FCA has said that it will ensure that any significant decisions on redress made in the future will be transparent, with appropriate governance, and supporting evidence will be properly recorded.

The FCA already has a more proactive approach and better systems, oversight and controls than were in place when the IRHP sales took place. A significant transformation programme is underway to ensure the FCA is a more innovative, adaptive and assertive regulator that can and will investigate and act earlier.

The FCA does not consider that the FSA was wrong to limit the scope of the redress scheme to less sophisticated customers and has concluded that it would not be appropriate or proportionate to take further action. Accordingly, the FCA will not seek to use its powers to require any further redress to be paid to IRHP customers.

Charles Randell, chair of the FCA, said: “I would like to thank John Swift QC for his thorough and thoughtful review. The FCA today is a very different organisation from the FSA as it existed when these products were sold and when it established the redress scheme. We would expect to act far sooner and more decisively today.

“We are transforming the FCA into a more innovative, adaptive and assertive regulator that is fit for the future. Mr Swift has made helpful recommendations that will strengthen our regulation, our supervision of firms and our approach to redress.”