In mid November the FCA gave an update on their future challenges and priorities. The full address can be read via the link at the end but I’ve pulled out the highlights for AFEP members here.
Firstly the word unprecedented was used. A lot. They gave special thanks to all in the industry who have worked to make the year run as smoothly as possible particularly those in firms who continued to serve clients, and in IT who kept systems running
They recognised they had introduced measures to protect consumers and to keep markets functioning at speed – AFEP members saw this in their emergency consultation in June. They recognise that the financial impact of the pandemic is being felt by the firms they regulate and whilst they can’t intervene to stop firms from failing in the face of economic distress they do expect a significant number of regulated firms to fail in the months ahead. Their role is to ensure that where this happens, the resulting harm and loss to customers and the wider financial system is kept to a minimum and that firms engage with them prior to any failure.
They also talked about Brexit and their work to minimise disruption, but mainly to approximately 1,500 non-UK firms who can continue operating in the UK, rather than the permissions of UK firms in the EU.
They are now turning their attention to the future regulatory framework. Following the Government’s recent consultation, one important question will be how they balance the need for regulators to have enough flexibility to act quickly while maintaining proper democratic oversight of our work.
It has been suggested (although not in this FCA statement) that HMT will give the FCA powers to write primary legislation so they can act quickly. If they will do this is still to be seen.
There is also change planned within the FCA with 3 reviews into their historic work and a transformation programme in 2021. They supervise around 60,000 entities and plan to invest in a more digital and data enabled approach with the idea that this allows them to intervene sooner to reduce harm to consumers and markets and be as efficient and effective for markets, consumers and firms as possible.
You can read the full address here:
https://www.fca.org.uk/news/speeches/facing-future-challenges-priorities