Combating financial crime, protecting consumer needs and strengthening wholesale markets are key priorities for regulators in the year ahead.
On 19 March 2024, the FCA published its business plan for 2024/25, setting out its priorities for the year ahead. Although business plans are now of less historical importance given that other publications such as the FCA's Three Year Strategy and Regulatory Initiatives Grid are in circulation, they still reflect the FCA's focus areas and progress. Provides companies with useful information regarding the flow of work during the process.
The FCA is currently in the final year of its three-year strategy, which has identified three key themes: reducing and preventing serious harm, setting and testing higher standards, and promoting competition and positive change. While last year's business plan was consistent with these themes, this year's focus is on three areas: reducing and preventing financial crime, putting consumer needs first and strengthening the UK's position in the global wholesale market. I changed direction slightly to put the . These last items are important as they underline the FCA's focus on reforms to the UK's key markets. There is also a strong focus on the FCA's ability to develop and strengthen its capabilities as a data-driven regulator, particularly in relation to market abuse and financial crime.
This blog post summarizes the FCA's work in these three focus areas and highlights key aspects of the remaining 10 priority areas assigned by the FCA.
Strengthening the UK's position in the global wholesale market
In addition to continuing its work on primary market reform, including new public offerings and entry into trading regimes, the FCA plans to support the industry's efforts around T+1 payments. A number of streams of work within the Wholesale Markets Review continue, including the revision of the rules on investment research, the preparation of new reporting rules under UK EMIR, supporting the government in developing the PISCES framework, and progressing work on the fixed income consolidation tape. Ru. The FCA also plans to improve market integrity through increased expertise, capacity and capacity, and to strengthen market oversight of fixed income and commodity markets.
Reducing and preventing financial crime
The FCA says it will continue to use a data-driven approach to identifying potential harms. We will continue to focus on investment fraud, sanctioned push payment fraud, money laundering, and financial sanctions compliance. The FCA has recently undertaken significant work in all of these areas. In line with its focus on data, the FCA will also increase its investment in systems to more effectively use intelligence and data in its financial crime operations.
Putting consumer needs first
The FCA remains committed to enforcing consumer obligations and will intervene where there is the highest risk of harm to consumers or where businesses need to take further steps to meet higher standards of consumer obligations. think about. The Commission will continue its oversight work to test companies' performance of consumer obligations and to improve how companies deliver positive outcomes for consumers. Regarding new initiatives, the FCA will undertake multi-company initiatives and market research across a range of sectors to raise standards. As recently announced, there will also be a review of how companies treat vulnerable customers.
Other priorities
- A smarter regulatory framework: The FCA notes that it has made significant progress to date in reviewing and replacing the Assimilation Act (formerly known as the EU Remain Act) and therefore no longer considers this a high priority initiative. ing. However, it remains an important workstream and may require significant investment as many files have not yet been reviewed. This is reflected in his FCA budget. Although the estimated annual cost of this workstream is 11% lower than last year, it remains by far the largest exceptional project in the FCA budget.
- Market abuse: Alongside its efforts to become a data-driven regulator, the FCA plans to significantly strengthen its ability to deal with the detection of market abuse, particularly across asset classes. The FCA will improve its market surveillance and intervention in debt and commodity markets. The FCA is demonstrating its ambition to remain a major player on the world stage, strengthening its resources and capabilities to influence data strategy in international markets. Work planned for this year includes publishing the results of a peer review on market abuse systems and controls in direct market access providers, publishing a discussion paper on the transition to a handbook of MiFID data reporting regimes for trade and reference data, and further unusual Includes additional questions. Convert transaction data into market cleanliness data.
- ESG: The FCA reaffirms its commitment to work on integrating new sustainability disclosure requirements, the investment labeling regime and anti-greenwashing rules, and to consult on extending the regime to portfolio management services in 2024. The FCA will also progress its work on transition finance and investment. Prepare to consider new nature-related regulatory principles that will apply to the FCA from the beginning of 2025.
- Digital market: The FCA will continue its work to assess the impact of AI on the UK market and will report to the government on its strategic approach to AI by the end of April 2024. FCA has demonstrated its commitment to maintaining an innovation-driven and technology-agnostic approach. It also said it would investigate digital consumer behavior and companies that take advantage of sludge practices.
- Operational resilience: Noting the March 31, 2025 deadline for businesses to comply with the new Business Resilience Framework, the FCA has clarified its expectations for how businesses should report operational incidents to regulators. We plan to issue a consultation document on the We also continue to work on developing a regulatory framework for significant third parties.
In particular, the FCA's annual funding requirements are expected to increase by almost 11% this year. This is partly due to “exceptional” projects such as the Smarter Regulatory Framework, the Advice Guide Boundary Review, the Access to Cash initiative, Open Banking, the new stablecoin regime and the InvestSmart campaign. However, the FCA's base budget for ongoing regulatory activities is expected to increase by 8.7% (9.7% after taking into account new costs related to consumer tax and the financial promotion regime). This reflects the regulator's ever-increasing workload, particularly given that its role has become more prominent in the UK's post-Brexit regulatory landscape.
