The Financial Conduct Authority (FCA) has released its Business Plan for the year 2024/25, outlining its priorities and objectives for the upcoming year. The plan underscores the FCA’s commitment to protecting consumers, promoting competition, and enhancing the integrity of the UK’s financial sector.
What have the FCA set out in their Business Plan 2024/25?
Consumer Protection
The FCA plans to test higher standards across the industry by further embedding the Consumer Duty. The regulator will continue to prioritise its focus on improving outcomes for vulnerable consumers, addressing consumer harm in high-risk areas such as high-cost credit, and enhance supervision of firms to ensure they treat customers fairly.
Appointed Representatives
The FCA has previously identified that some Principal firms have inadequate oversight of Appointed Representatives (ARs), leading to risks for consumers and market integrity within the financial sector. New rules and guidance implemented in December 2022, aims to address these issues by enhancing oversight, increasing information disclosure to the FCA, and raising standards across financial services.
Key initiatives for ongoing improvement in oversight of ARs include:
- Utilising updated data sources, including enhanced Regulatory Gateway forms and regulatory returns, to conduct deeper analysis of AR activities.
- Strengthening scrutiny and engagement with Principal firms as they appoint ARs.
- Implementing assertive supervision of high-risk principals through regulatory tools and enforcement actions when necessary.
Market Integrity
The Business Plan outlines initiatives aimed at combating financial crime, including money laundering and fraud, as well as strengthening market surveillance and enforcement activities to detect and prevent market abuse.
Promoting Competition
The FCA is committed to fostering competition in financial markets to benefit consumers. To this end, it plans to focus on initiatives aimed at promoting innovation, reducing barriers to entry for new market participants, and addressing anti-competitive practices that may harm consumers or stifle competition.
Technology and Data
Recognising the importance of technology and data in driving innovation and improving regulatory outcomes, the FCA plans to invest in technology capabilities and data analytics tools. This includes enhancing its ability to monitor and supervise firms effectively, as well as leveraging data to identify emerging risks and trends in financial markets.
Climate Change and Sustainability
In line with global efforts to address climate change and promote sustainability, the FCA acknowledges the significant impact of environmental, social, and governance (ESG) factors on financial markets. The Business Plan outlines the FCA’s commitment to integrating climate risk considerations into its regulatory approach and supporting the transition to a sustainable financial system.
International Engagement
Given the interconnected nature of financial markets, the FCA emphasises the importance of international cooperation and collaboration. It intends to actively engage with international counterparts and participate in global regulatory initiatives to promote consistent regulatory standards and address cross-border challenges effectively.
Overall, the FCA Business Plan for 2024/25 reflects the regulator’s strategic priorities and objectives in ensuring the integrity, stability, and competitiveness of the UK’s financial sector. Through targeted initiatives, like the Consumer Duty, focused on consumer protection, market integrity, competition, technology, sustainability, and international engagement, the FCA aims to uphold its regulatory mandate and safeguard the interests of consumers and market participants alike.
