The Financial Conduct Authority (“FCA”) has just published its Business Plan for 2019/20, setting out its strategic objectives and priorities for the year ahead.
The Business Plan details eight cross-sector priorities, with various specific activities highlighted. In brief, these priorities are as follows:
- EU withdrawal and international engagement – supporting a smooth transition post-Brexit, to ensure market integrity and the protection of consumers.
- Firms’ culture and governance – including the extension of the Senior Managers and Certification Regime to all regulated firms.
- Operational resilience – developing policy proposals and continuing to work with firms to increase their awareness around cyber-attacks.
- Financial crime and anti-money laundering – focussing on tackling fraud, scams and money laundering through intelligence, data, strengthening partnerships and raising standards of professional bodies.
- Fair treatment of existing customers – monitoring pricing practices and tackling price discrimination.
- Innovation, data and data ethics – examining the use of data by firms and publishing proposals on regulation of crypto-assets.
- Demographic change – publishing a discussion paper on intergenerational differences and running the Financial Lives survey for a second time.
- The future of regulation – publishing a Feedback Statement on the Duty of Care Discussion Paper, using technology to simplify the FCA Handbook and commencing an annual statement on regulatory perimeter issues.
Supporting an ‘orderly transition’ when the UK leaves the EU is clearly positioned as the FCA’s ‘immediate’ priority. A key concern is to mitigate the risks for UK markets and consumers, which may result from exposure to potential ‘gaps in global regulation’. To this end, £5 million of the 2019/20 budget has been set aside for ‘EU withdrawal costs’ (the same amount which the FCA allocated to Brexit-related costs last financial year).
The regulator reiterates throughout the Business Plan that ‘protecting consumers from harm’ is at the core of the FCA’s work and objectives. In light of this, there will be a renewed promotion of the 29 August 2019 deadline for consumers to make PPI complaints.
The FCA has also set out sector-specific priorities for the seven sectors it regulates. There is a focus again on consumer protection, especially in the retail sectors, with reviews into high-cost credit, overdrafts and ‘Buy now pay later’ planned for the coming year.
Notably, in the investment management sector, there will be a consultation in 2019/20 on a new prudential regime for MiFD investment firms. This proposed regime will be in line with the EU Investment Firms Directive (forthcoming for 2020/21), highlighting the fact that the FCA plans to continue to engage with EU regulation.