IT HAS BEEN A TUMULTUOUS FEW MONTHS AS WE FACE ECONOMIC AND GEOPOLITICAL CHANGES AND DISRUPTION, AND DEAL WITH THE IMPACTS ACROSS THE FINANCIAL SERVICES SECTOR.
AT THE CISI’S 30TH ANNIVERSARY DINNER, NIKHIL RATHI, CHIEF EXECUTIVE AT THE FCA, SPOKE OPTIMISTICALLY ABOUT HOW WE ARE NOW, AS A SECTOR, MORE RESILIENT TO FACE THESE CHALLENGES.
HE ENDED HIS SPEECH ABOUT FACING THE NEXT 30 YEARS WITH A RALLYING CRY THAT, AT THEIR CORE, THE CISI AND THE FCA HAVE A SIMILAR FUNCTION: “TO BOOST KNOWLEDGE AND SKILLS AND STEER PROFESSIONALS TOWARDS ACTING WITH INTEGRITY”. THIS IS KEY TO DRIVING TRANSFORMATION IN THE FINANCIAL SERVICES SECTOR AND ITS REGULATOR TOO.
UPDATES AS AT 16 MAY 2022.
VIRALI.PATEL@
DWF.LAW
FCA STRATEGY AND BUSINESS PLAN In April, the FCA published its Strategy for 2022 to 2025 and Business Plan for 2022/2023 explaining its regulatory agenda for the coming year. Historically, the FCA set sub- sector-specific plans and target outcomes but notes, for the first time, that the Strategy and Business Plan set outcomes which are expected from all financial services firms across all markets. The Strategy builds on activities the FCA launched in July 2021 when it committed to become more innovative, assertive, and adaptive to transform into a data-led regulator that can face the threats and seize the opportunities of the future. There are plenty of statements of
intent but relatively little of substance or detail. Thematic, outcomes-focused and therefore (arguably) rather uncertain, if not arbitrary, regulation is here to stay.
The four topline outcomes are: 1. fair value 2. suitability and treatment 3. confidence 4. access.
The three key areas of focus are: 1. reducing and preventing serious harm
2. setting and testing higher standards 3. promoting competition and positive change.
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The FCA sets out a total of 13 commitments in the three areas of focus to explain how it is joining up its actions to help enable the sector to deliver the topline outcomes. Each commitment will address one or more of the outcomes, and the themes that cut across sectors and consumer and wholesale markets. Both the topline outcomes and commitments will be supported by metrics to improve accountability, transparency, and monitoring.
KEY CHANGES Results-based: The FCA notes that its supervisory approach will be more results-based than ever, rather than driven by processes. Its decisions will be data-based and its adoption of an outcomes-based approach will ultimately guard against inconsistent regulation. This is intended to provide firms with greater flexibility as to how they deliver good outcomes with a greater focus on testing and demonstrating that decisions result in fair results for consumers. “By focusing more on end outcomes, and working across sectors and markets”, the FCA envisages it will be “better able to respond to new issues and macroeconomic challenges”, saying, “Our new, more adaptive approach to allocating resources and monitoring our performance will make us more agile
THE REVIEW SEPTEMBER 2022
SEPTEMBER 2022 – ISSUE 22
REGULATORY UPDATE
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