Post-Brexit, if you are a predominantly UK business, your regulated entity should be here to protect investors and the integrity of the markets.
Highlights
- Cost of living crisis means consumers are more exposed to risk and more reliant on financial services.
- New consumer duty will ensure firms take into account ‘good
outcomes’ for consumers and clear rules will in future cut costs for
firms.
- Supporting innovation to encourage long-term economic growth and international competitiveness:
- Extending an early oversight scheme to give 300 newly authorised firms guidance on regulatory issues as they grow
- Over 500 applications to attend our first ever CryptoSprint event in May
Last 12 months
It is great to be here again at this important event. It doesn’t seem
long ago that I was last telling this audience about our plans to
transform the FCA.
To be more rigorous on firms seeking approval to operate in our
markets, to tailor our rules to better suit our global markets and play a
leadership role in supporting the market-led transition to a more
sustainable economy.
We are being tougher on firms causing harm. We launched the first
ever criminal prosecution under anti-money laundering regulations and
are acting against individuals carrying out regulated activities without
authorisation.
We have empowered more colleagues to take more decisions, so we act
faster and are being more proactive even where we don’t have powers, be
it by positively engaging with the Government to ensure scams are
covered by the Online Safety Bill, or working with Google so they
voluntarily changed policy to only permit FCA registered firms to
advertise financial promotions with them.
Following our engagement, Meta have now promised to do the same this
year. We look forward to seeing them deliver and await clearer plans
from Twitter and others.
To truly transform we must continue building an operational platform
that can adapt and facilitate collaboration, with the human capabilities
to harness a data-led approach.
That is the only way we can effectively face the threats and
opportunities, be it market abuse, digitalisation of financial services,
cost of living challenges or ESG reforms.
Cost of living crisis
Our economy already faced rising inflation on the back of the
economic recovery emerging from the pandemic. War was then visited on
Ukraine by Russia, with the resulting aftershock for commodity and
agricultural prices, rippling down to wholesale markets, firms and
consumers.
Inflation is set to reach a 40 year high this year with energy bills
rising much faster than wages. Those least able to bear the rises will
be hit the hardest.
Our own data shows that over a quarter of UK adults have low
financial resilience. Cost of living challenges mean consumers are more
exposed to risk while also being more reliant on financial services.
So our focus is on ensuring all firms we oversee act in their customers’ interests.
Our three-year strategy,
published earlier this month, sets out market-wide outcomes we expect
all firms to deliver, while holding ourselves to tougher standards.
We are stopping firms with inadequate controls from entering our
markets. One in seven applicants currently do not obtain authorisation,
up from one in 13.
We’re now hiring another 80 colleagues to focus on the most
problematic firms, already in our markets, going further to remove more
quickly those firms that can’t or won’t meet basic standards. And
setting and testing higher standards, where needed.
New Consumer Duty
Our New Consumer Duty
is progressing well, with final proposals coming in July. This is
designed to ensure firms take account of the actual impact of their
services and product suitability on consumers.
Selling someone the right product with suitable customer service is uncontroversial but, too often, established firms don’t.
I want to thank the many business leaders who have engaged positively
with us as we develop this significant policy change and assess its
impact which will include:
- action to tackle competitors who drive down standards
- giving firms greater certainty about how they should treat consumers and flexibility on how they deliver good outcomes
- supporting future innovation by being clear about the standards required, whatever the product
We envisage fewer future rule changes as a result, which should lower costs to firms.
Action on Russia
Changing our operating model has been vital in our response to the
war in Ukraine. We moved fast to respond to the introduction of a range
of globally coordinated sanctions.
We are becoming more capable of working through solutions at
extremely short notice, working hand in glove with domestic and
international partners.
We will publish proposals allowing the exceptional use of side
pockets in investment funds, given the challenges of disposing of
Russian and Belarussian assets.
Our work with the Bank of England and others made sure we could
effectively monitor volatile commodity markets and as we both saw with
London Metal Exchange (LME) and LME Clear, take assertive action where
necessary.
LME has since agreed to appoint additional independent directors to strengthen its governance.
Economic, Social and Governance (ESG) reforms
As the world is looking to financial markets to enable the transition
to a greener and more sustainable economy, international collaboration
has never been more vital.
As a regulator, we have been mandated by the government to help firms
transition to net zero and asked to take into account Government policy
in relation to energy security.
We are supporting international partners who are beginning to mandate
climate related disclosures while we continue to build on the changes
we introduced here last January. ...
more at FCA
© FCA - Financial Conduct Authority
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article