FCA Business Plan 2021/22

Jul 19, 2021 12:00:00 AM

What has happened?

The FCA issued its 2021/22 Business Plan on 15th July 2021. The Business Plan is available here. It is the first annual plan since Nikhil Rathi joined as Chief Executive in October 2020.

What do you need to do?

In the Business Plan, the FCA has made a commitment to be a more, innovative, adaptive and assertive regulator. In a statement on its role, it says it will be accountable for its progress on:

supporting market integrity and sustainable innovation, ensuring firms start with high standards and maintain them,
using new approaches to find issues and harm faster, with £120m invested in its data strategy over the next three years,
tackling misconduct and being proactive at the boundaries of the perimeter,
enabling consumers to make informed financial decisions, and
investing in people, reshaping its culture and working with others to achieve more

The Business Plan sets out the key areas of focus for the FCA in the coming year. In consumer markets, its priorities include:

strengthening financial promotions rules in relation to investments,
continuing to improve standards of pension advice,
a consumer campaign on scams and high-risk investments,
progressing proposals for the new Consumer Duty to raise standards in firms’ treatment of consumers, and
preparing for FCA regulation of the pre-paid funeral plan sector from July 2022.

In wholesale markets, the focus includes:

continuing to develop plans to make primary and secondary markets work better while maintaining high standards,
tightening supervision and supervisory expectations of Appointed Representatives and their principal firms to reduce risks that the use of ARs in wholesale markets weakens conduct standards, and
continuing to support the transition away from sterling LIBOR to alternative risk-free rates

The Business Plan also sets out a number of cross-cutting priorities including:

working with partners to help drive down the incidence and impact of fraud,
stronger oversight for newly authorised firms (a regulatory ‘nursery’),
publishing a three-year Consumer Investments Strategy – this will include how the FCA tackles firms and individuals that cause consumer harm,
improving diversity and inclusion, both at the FCA and in regulated firms, and
supporting environmental goals by adapting the regulatory framework to enable a market-based transition to net-zero carbon emissions

The FCA also announced that it will begin a review of aspects of the rules on the scope and coverage of Financial Service Compensation Scheme payouts for specific regulated activities.

The Business Plan commits the FCA to becoming a regulator for the whole of the UK. At present, the FCA has offices in London and Edinburgh and it is exploring opening an office in Leeds with at least 100 staff based there in the first phase, doubling headcount in Edinburgh to over 200 over the next two years and establishing a presence in Belfast and Cardiff for the first time by the end of the year.

How can we help you?

If you’d like to know more about how we can help you with any regulatory compliance issues, our expert team is here to help.

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