The FCA has revealed a new initiative aimed at tackling ‘phoenixing.’

The watchdog announced a new training scheme via its ‘Approach to Authorisation’ document, which was updated yesterday.

The paper read: “We know that there is an issue with firms or individuals seeking to avoid liabilities by liquidating and transferring their assets to a new or different firm where they will continue to trade.

“This is often known as ‘phoenixing’.”

“The challenge here is that evidence of mis-selling and resultant liabilities to consumers can take a long time to emerge and is often not available when firms or individuals seek authorisation in new or different firms.”

The report added: “We are also rolling out a training programme to support our case officers to spot phoenixing by financial advisers using this enhanced intelligence.”

The updated document also provided a glimpse into the process the FCA uses when considering authorisation.

The FCA says it “provides support to firms and individuals to help them make the changes necessary for authorisation”, but confirmed this was “not an open- ended process” and that ultimately a decision has to be made whether a firm should be authorised or registered within statutory deadlines.

It added: “Our experience shows us that some firms are simply not ready to meet our minimum standards for authorisation or registration.

“In these circumstances, we will formally refuse to authorise or register a firm.

“Often, the firm will withdraw its application before we make a formal refusal.”

The regulator says it takes a similar approach to individuals.

If the FCA is not satisfied that a person is “fit and proper to hold a role at an authorised firm, we will explain why,” it said.

“The individual will have an opportunity to demonstrate to the FCA, or to the FCA and PRA, that they are fit and proper, by providing additional evidence in writing or at interview.

“Again, this is not an open- ended process.”