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The FCA in 2024-25

Author: Niall Hearty  27 March 2024
3 min read

Niall Hearty of Rahman Ravelli details the main aspects of the Financial Conduct Authority’s Business Plan 2024-25.

The UK’s Financial Conduct Authority (FCA) has produced its 2024-25 Business Plan.

In it, it cites challenges such as higher interest rates and persistent inflation, global financial risks and geopolitical risks.

The FCA also outlines its areas of focus for the year, which are based on this being the final year of its three-year strategy.

These are:

  • Protecting consumers
  • Ensuring market integrity
  • Promoting effective competition

It adds that it will look to “facilitate international competitiveness of the UK economy’’ and medium to long-term growth, while also improving the attractiveness and global reach of UK wholesale markets and providing opportunities for financial services companies to invest, innovate and expand in the UK.

The FCA will continue to deliver on its 13 public commitments, with a focus on:

  • Reducing and preventing financial crime
  • Putting consumers’ needs first
  • Strengthening the UK’s position in global wholesale markets

Reducing and preventing financial crime

The FCA says it will continue to take a data-led approach to identifying potential harm for supervisory and/or enforcement action. While the financial services sector must continue to take the lead here, the FCA expects other partners and sectors to play a vital part. 

It is aiming to slow the growth in investment fraud and Authorised Push Payment (APP) fraud and reduce the levels of money laundering through the firms it supervises directly. It plans to increase investment in its systems to use intelligence and data more effectively in order to target higher risk firms and activities.

The FCA also intends to continue cracking down on unauthorised financial promotions and associated websites and social media, raising awareness of fraud through consumer campaigns and  accounts, and working with bodies such as the National Economic Crime Centre (NECC) to boost the response to financial crime. Expanded intelligence-gathering capabilities and strengthened proactive supervision through the Office for Professional Body Anti-Money Laundering Supervision (OPBAS) is also planned, with a focus on anti-money laundering (AML) systems and controls at firms deemed higher risk.

Putting consumers’ needs first

With the Consumer Duty having come into force last year for products and services still on sale to new customers or available for renewal by existing customers, the FCA says there has been “a step change in our expectations of firms’’. From 31 July 2024, firms need to ensure that both open and closed products are delivering the right outcomes for consumers. The FCA will continue to focus its interventions on where there is greatest risk of harm or where more work is needed by firms to identify and address gaps and to meet the higher standards of the Duty. 

It emphasises the need for firms to act in good faith towards consumers, sell them products and services that meet their needs at a fair price – and ensure consumers are provided with the right information to make decisions.

Among its planned activities, the FCA will assess firms’ treatment of customers in vulnerable circumstances and will continue its supervisory work to test firms’ implementation of the Consumer Duty. It will also continue its work to ensure people with savings receive a fair deal.

The FCA is set to finalise changes to its mortgage, consumer credit and overdraft rules to improve outcomes for consumers in financial difficulty. It will consult on changes to its debt advice rules to improve outcomes for vulnerable consumers.

Strengthening the UK’s position in global wholesale markets

The FCA is aiming to encourage innovation and evolving markets by supporting industry work on the T+1 settlement, under which most securities transactions will settle on the next business day following their transaction date.

It will also deliver its set of Primary Market policy reforms - concluding its review of the Listing Regime and publishing proposals for a new public offer and admission to trading regime. The FCA will also consult on its regulatory changes to introduce more options on how to pay for investment research and on its proposals for the commodity position limits regime. 

It will ensure that derivative markets are ready to implement the new derivative reporting rules under the UK European Market Infrastructure Regulation (UK EMIR) in September 2024 and will continue to ensure the orderly transition away from LIBOR. There are also plans for the FCA to work with the Bank of England to support the Treasury’s objective of creating the Digital Securities Sandbox, which will open to applications during 2024. It will also work with the Treasury to meet the Government's objective of launching an intermittent trading platform (Private intermittent Share and Capital Exchange Service (PISCES)) by the end of 2024.  

Final rules for the Overseas Fund Regime applications gateway are to be confirmed, and there will be modernisation of the FCA’s authorisations processes during 2024.

The Business Plan also briefly covers the FCA’s other commitments, which include preparing financial services for the future, dealing with problem firms, taking assertive action on market abuse, reducing harm from firm failure, its environmental, social and governance (ESG) priorities, and shaping digital markets to achieve good outcomes.

Niall Hearty C 07998

Niall Hearty

Partner

niall.hearty@rahmanravelli.co.uk
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Niall has a wealth of corporate crime expertise and an ability to coordinate global bribery and corruption cases. His achievements in such investigations have made him a logical choice for corporate clients.

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