Financial Conduct Authority plans to be a ‘more assertive’ regulator

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The Financial Conduct Authority (FCA) has committed to being a ‘more innovative, adaptive and assertive regulator’ in its Business Plan for 2021-22.

The regulator’s proposals will see greater focus on authorisations and new business, with more attention paid to examining applicants’ financials and business models. It is also likely that advisers who do not use their existing authorisations may find these permissions removed temporarily or permanently.

In the consumer market the FCA is planning to further strengthen rules on financial promotions, continue to focus on improving standards of pension advice and running a consumer campaign on scams and high risks investments. The regulator will also progress its plans for a new ‘Consumer Duty’ (see Brunel News July 2021).

In the wholesale market the FCA’s focus will be on developing plans to make markets work better following Brexit and on supporting a smooth transition away from LIBOR.

The regulator says it is planning to work with partners to cut down on the incidence and impact of fraud. It will also encourage diversity and inclusion at the FCA and regulated businesses and support moves towards net-zero.

Nikhil Rathi, the FCA’s chief executive said: “The FCA must continue to become a forward-looking, proactive regulator. One that is tough, assertive, confident, decisive, agile. One that acts, acts fast—and where we can’t act, engages enthusiastically with those who can.”

Jonathan Cavill of Pinsent Masons welcomed the business plan: “It’s positive to see the FCA challenging itself and assessing how it can improve to make real positive change in the financial services sector,” he said.

James Burgoyne of Brunel Professions questions how the FCA’s plans to be more assertive and interventionist will play out in practice. “Advisers working in higher risk areas, such as pension transfers, speculative investments and crypto assets will probably be required to do even more to meet regulatory standards,” he said. “Professional indemnity insurers will be watching the FCA’s moves closely and are likely to offer their best rates to advisers working in lower-risk practice areas.”

The FCA’s press release and business plan have been published on its website. Articles about the regulator’s plans have been published by Global Financial Regulatory Blog, Pinsent Masons Out-Law and Pensions Age.

Professionalindemnity.com is owned by Brunel Professions, which is a leading professional indemnity insurance broker in the UK. Click here to get a quote or call 0345 450 1074 to speak to a broker.

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