1. Resilience. With persistent inflation, global financial risks and geopolitical risks, businesses must be ready to demonstrate how they can remain resilient in the face of 'extraordinary events'. The FCA is particularly concerned about the increasing levels of systemic risk accumulating in the financial system due to firms' dependence on significant third parties. The company plans to share relevant information and data identified through the new financial resilience returns, including good and bad habits of downsizing plans. A consultation paper is also being prepared to clarify the FCA's expectations about how companies should report operational resilience incidents to regulators.
2. financial crime. The FCA will continue its focus on companies that may be enabling financial crime, with a focus on proactively assessing companies' AML systems and controls for those deemed to be high risk. The company continues to take a data-driven approach to identify potential harms and focus oversight and enforcement actions, increasing investment in systems to enable more effective use of intelligence and data. .
3. Market monitoring. The FCA is strengthening its capabilities and capabilities through people, technology and data to anticipate and better respond to increased market volatility and events in global markets. We plan to strengthen market surveillance of fixed income and commodity markets, strengthening our ability to detect and track market abuse across asset classes.
4. Market abuse systems and controls. The FCA will publish the results of its peer review of market abuse systems and controls at direct market access providers. It also plans to release revised market cleanliness data that captures more unusual transactions.
5. Consumer obligations. Interventions will continue to focus on non-performance of new obligations. Where the FCA has identified the greatest risk of harm and in relation to companies that have been slow to identify and address gaps. The FCA is focused on the experience of vulnerable customers.
6.AI. The FCA is interested in leveraging AI to prevent fraud and fraud and improve customer experience. The company is piloting an AI hub to support “innovators.”
7. Digital assets. Both digital securities and tokenization will receive special attention. The Digital Securities Sandbox will begin accepting applications in 2024, and work appears to be well underway to implement market abuse regulations for crypto assets.
8. Technology companies and professional advisors. The FCA is set to publish the results of its consultation on data asymmetry between Big Tech and other financial services firms. We are also working closely with the Competition and Markets Authority's Digital Markets Division on new pro-competition regimes for digital markets. Regarding specialist advisers, the FCA is increasing active oversight through its specialist agency, the Anti-Money Laundering Supervision Office, to drive improvements in the legal and accounting sectors.
9.ESG. The FCA plans to extend the existing regime, starting with the Portfolio Management Consultation in 2024. There is mention that the FCA is “preparing to take into account natural regulatory principles” that are scheduled to come into force, but it is not entirely clear what the FCA will prescribe.
10. Markets and products to focus on. Insurance, credit cards, pensions, auto finance, access to cash, fixed income markets, commodity markets, derivatives markets, and fixed income markets are all at the center of regulatory attention.
This year marks the final year of FCA's three-year strategy from 2022 to 2025. This is the first time the FCA has set out a three-year strategy, but it is not yet clear whether the next three-year strategy will follow or whether the FCA will adopt a new approach in 2025. This year's business plan includes the same 13 commitments. Similar to last year, 'preparing financial services for the future' has been given a lower priority, reflecting the progress the FCA believes it has made in this specific objective.
