The FCA Wants Greater Investor Protection. This is Their Plan

by Damian Chmiel
  • The FCA has entered the second year of its three-year strategy.
  • It accelerates its work in four main areas, focusing on further investment and increased resources.
Financial Conduct Authority (FCA) logo on a building in the United Kingdom
Bloomberg

The British Financial Conduct Authority (FCA ), the supervisor of the local financial market, has published its business plan for 2023-2024, setting a roadmap for the next 12 months, in line with the three-year development strategy unveiled a year ago.

FCA Presents Roadmap for Next 12 Months

According to the FCA statement, the market watchdog wants to focus on four primary areas of its work via increased resources and further investments. These areas include concentrating on consumers' needs, preparing financial services for the future, strengthening the position of the UK in the global wholesale markets and reducing and preventing financial crime.

"We set out a bold vision last year of what we wanted the FCA to be, and we are well underway to achieving our objectives thanks to our talented colleagues and the better use of technology and data across our organization," Nikhil Rathi, the Chief Executive of the FCA, said.

The FCA launched its three-year plan to "improve outcomes for consumers and in markets throughout the UK" a year ago. A crucial aspect of the FCA's strategy involves closing down businesses that fail to comply with fundamental regulations. To significantly curb fraudulent activities, the organization recruited 80 individuals. Additionally, greater attention is paid to crypto firms that conduct illegal activities or harm consumers.

Alexander Culley, the Chief Executive Officer
Alexander Culley, the CEO and Founder at C&G Regulatory Solutions


“Equipped with enhanced digital supervision capabilities, the FCA has promised an extremely assertive approach to fulfilling the objectives outlined in its 2023/24 Business Plan. Unsurprisingly, the regulator has expressed particular concern for the welfare of vulnerable customers in a period of extreme market volatility coupled with the spiralling costs of living. Therefore, Stratford is determined to rapidly identify firms that are failing to maintain adequate financial and non-financial resources to ensure their operational resilience," Alexander Culley, CEO and Founder at C&G Regulatory Solutions, commented for Finance Magnates.

According to Culley, this approach is likely to result in the FCA canceling the permissions of those firms, potentially forcing them into insolvency, as in the case of Pello Capital in Q4 2022.

"With the fusion of the Consumer Duty with existing regulations rapidly on the horizon, particularly the Investment Firms Prudential Regime, the 2023/4 Business Plan is essential reading for any directors or senior managers who do not want to see their retail brokerage become a casualty of the FCA’s no-nonsense outlook," he added.

FCA and Four Pillars of Further Activities

As the FCA enters the second year of its three-year strategy, it has set out several key factors in its business plan that it will want to focus on. The FCA protects people from unfair treatment and ensures that firms support struggling consumers. With Consumer Duty coming into force in July, the FCA aims to set higher consumer protection standards, encouraging innovation and competition.

The FCA will invest over £12m in the Future Regulatory Framework (FRF) and Edinburgh Reforms to support the UK's economic growth and competitiveness. They will also continue supporting innovative and high-growth firms through their Sandbox and Early and High Growth Oversight functions.

"With many consumers across the UK struggling with the cost of living and markets events causing concern, we have put in place vital changes over the past few years, which mean we're better set up to face these challenges," Rathi added.

Additionally, the regulator plans to reform the listing regime to attract leading firms and encourage competition. On top of that, it will explore improvements to asset management regulation and consult on consolidated tapes to enhance wholesale data accessibility.

Finally, the FCA aims to minimize financial crime through strengthened authorization processes, improved assessments of regulated firms, and increased staff for investigation and prosecution. Additionally, the supervisor wants to develop tools to find and remove scams, having already taken down hundreds of websites and issued over 1800 alerts in 2022.

FCA Closes Active Three Months of 2023

The British regulator is undoubtedly one of the most active among European and global peers, as the first quarter of 2023 showed. During that time, the FCA hired joint Executive Directors for Enforcement and Market Oversight, launched a consultation on updating regulations for the asset management industry, and prepared new rules for promoting cryptocurrency services in the UK.

Over the previous year, the FCA rejected 8,582 rogue financial promotions in 2022 and sought their amendment or removal by authorized firms. This is approximately 1,400% more than the 573 financial promotions the regulator rebuffed in 2021.

To protect customers even better, the British supervisor employed 1,000 new officers responsible for dectecting potential financial harm. Additionally, it opened an office in Leeds and accelerated its expansion in Edinburgh. According to the FCA's statement, these steps were vital to improve 2022 statistics and to continue current work on reforms that were supporting competitiveness and security in the UK financial market.

The British Financial Conduct Authority (FCA ), the supervisor of the local financial market, has published its business plan for 2023-2024, setting a roadmap for the next 12 months, in line with the three-year development strategy unveiled a year ago.

FCA Presents Roadmap for Next 12 Months

According to the FCA statement, the market watchdog wants to focus on four primary areas of its work via increased resources and further investments. These areas include concentrating on consumers' needs, preparing financial services for the future, strengthening the position of the UK in the global wholesale markets and reducing and preventing financial crime.

"We set out a bold vision last year of what we wanted the FCA to be, and we are well underway to achieving our objectives thanks to our talented colleagues and the better use of technology and data across our organization," Nikhil Rathi, the Chief Executive of the FCA, said.

The FCA launched its three-year plan to "improve outcomes for consumers and in markets throughout the UK" a year ago. A crucial aspect of the FCA's strategy involves closing down businesses that fail to comply with fundamental regulations. To significantly curb fraudulent activities, the organization recruited 80 individuals. Additionally, greater attention is paid to crypto firms that conduct illegal activities or harm consumers.

Alexander Culley, the Chief Executive Officer
Alexander Culley, the CEO and Founder at C&G Regulatory Solutions


“Equipped with enhanced digital supervision capabilities, the FCA has promised an extremely assertive approach to fulfilling the objectives outlined in its 2023/24 Business Plan. Unsurprisingly, the regulator has expressed particular concern for the welfare of vulnerable customers in a period of extreme market volatility coupled with the spiralling costs of living. Therefore, Stratford is determined to rapidly identify firms that are failing to maintain adequate financial and non-financial resources to ensure their operational resilience," Alexander Culley, CEO and Founder at C&G Regulatory Solutions, commented for Finance Magnates.

According to Culley, this approach is likely to result in the FCA canceling the permissions of those firms, potentially forcing them into insolvency, as in the case of Pello Capital in Q4 2022.

"With the fusion of the Consumer Duty with existing regulations rapidly on the horizon, particularly the Investment Firms Prudential Regime, the 2023/4 Business Plan is essential reading for any directors or senior managers who do not want to see their retail brokerage become a casualty of the FCA’s no-nonsense outlook," he added.

FCA and Four Pillars of Further Activities

As the FCA enters the second year of its three-year strategy, it has set out several key factors in its business plan that it will want to focus on. The FCA protects people from unfair treatment and ensures that firms support struggling consumers. With Consumer Duty coming into force in July, the FCA aims to set higher consumer protection standards, encouraging innovation and competition.

The FCA will invest over £12m in the Future Regulatory Framework (FRF) and Edinburgh Reforms to support the UK's economic growth and competitiveness. They will also continue supporting innovative and high-growth firms through their Sandbox and Early and High Growth Oversight functions.

"With many consumers across the UK struggling with the cost of living and markets events causing concern, we have put in place vital changes over the past few years, which mean we're better set up to face these challenges," Rathi added.

Additionally, the regulator plans to reform the listing regime to attract leading firms and encourage competition. On top of that, it will explore improvements to asset management regulation and consult on consolidated tapes to enhance wholesale data accessibility.

Finally, the FCA aims to minimize financial crime through strengthened authorization processes, improved assessments of regulated firms, and increased staff for investigation and prosecution. Additionally, the supervisor wants to develop tools to find and remove scams, having already taken down hundreds of websites and issued over 1800 alerts in 2022.

FCA Closes Active Three Months of 2023

The British regulator is undoubtedly one of the most active among European and global peers, as the first quarter of 2023 showed. During that time, the FCA hired joint Executive Directors for Enforcement and Market Oversight, launched a consultation on updating regulations for the asset management industry, and prepared new rules for promoting cryptocurrency services in the UK.

Over the previous year, the FCA rejected 8,582 rogue financial promotions in 2022 and sought their amendment or removal by authorized firms. This is approximately 1,400% more than the 573 financial promotions the regulator rebuffed in 2021.

To protect customers even better, the British supervisor employed 1,000 new officers responsible for dectecting potential financial harm. Additionally, it opened an office in Leeds and accelerated its expansion in Edinburgh. According to the FCA's statement, these steps were vital to improve 2022 statistics and to continue current work on reforms that were supporting competitiveness and security in the UK financial market.

About the Author: Damian Chmiel
Damian Chmiel
  • 1479 Articles
  • 29 Followers
About the Author: Damian Chmiel
Damian's adventure with financial markets began at the Cracow University of Economics, where he obtained his MA in finance and accounting. Starting from the retail trader perspective, he collaborated with brokerage houses and financial portals in Poland as an independent editor and content manager. His adventure with Finance Magnates began in 2016, where he is working as a business intelligence analyst.
  • 1479 Articles
  • 29 Followers

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