The UK’s financial services sector wants the Financial Conduct Authority (FCA) to improve communications with the firms that it oversees, and needs clearer and more predictable regulation, as well as more transparency over the Brexit issue.
These are the three key highlights from the FCA Practitioner Panel’s survey of FCA-regulated firms, which was conducted in February/March this year. The survey allows the institutions that the FCA regulates to evaluate its performance as a regulator, which in turn provides important feedback on the expectations of firms for the nation’s watchdog.
The responses of more than 2,000 firms found that 70% of regulated firms are satisfied with the authority’s effectiveness regarding securing an appropriate degree of consumer protection. This is compared with just 67% of all respondents of last year’s survey.
Still, nearly 30% lack confidence in the FCA’s ability to deliver clear information on the process of preparing to exit the European Union. Respondents also wanted the FCA to ensure that the UK market remains attractive and competitive during the process.
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Focus for improvement
The survey identified several key areas for further improvement. It noted that the FCA must put more effort into communicating with firms, offering them clear guidance and building up their understanding of the regulator’s future plans, in particular regarding the challenges of Brexit.
Responding to the survey findings, Andrew Bailey, Chief Executive of the FCA, commented: “We are pleased that firms continue to rate our performance as a regulator highly. But we know that we can always do better and the survey is very helpful in identifying a number of areas for improvement. In our Mission we committed to be more transparent, communicating clearly with firms so that they understand our role, remit and expectations. The survey also reflects concerns amongst firms about the uncertainty ahead for the financial services sector and we remain committed to delivering effective regulation which will enhance the UK financial system in the future.”
António Simões, Chair of the FCA Practitioner Panel, added: “We are encouraged by the findings of this year’s survey that there has been progress against all three of the FCA’s operational objectives. Last year we identified that there were concerns around the competition objective, and that the life and pensions industry was more generally dissatisfied with the work of the FCA than other sectors. To see progress against both these points is a sign that the regulator is heading in the right direction. The Panel will continue to work with the FCA to address the issues raised in the survey about communication, volume of regulation and the challenges of Brexit.”