Syed Rahman of Rahman Ravelli outlines the Financial Conduct Authority’s plans to reduce firms’ reporting obligations
The Financial Conduct Authority (FCA) is looking to lessen the data reporting burden on firms in order to help UK economic growth.
It has said it only wants to collect the data it needs for supervision. The planned reporting cuts will affect 16,000 businesses, such as investment firms, financial advisers and insurance brokers.
The FCA believes the cuts will help it meet the written commitment it gave to the government in January to support UK growth. The move can also be viewed as the FCA’s response to concerns raised by firms about the reporting burden they face.
The cuts will see the FCA removing three regular returns - which it will “decommission’’ from its 10,000-page handbook - that it currently requires from firms:
- The need for retail investment advisers to notify the FCA within 20 days of them either upholding three complaints in any 12-month period for one adviser or upholding a single complaint leading to over £50,000 in compensation.
- The FCA questioning of 4,500 firms every six months about whether they have held client money and assets, and whether they lend stocks using those assets. The FCA has said it collects some of this data elsewhere and believes the stock lending question lacks enough detail to be used for supervision.
- Part of the core form for advisers on mortgages, non-investment insurance or investment products. This part of the form asks for confirmation every half-year that firms have told the FCA of changes in close links or controllers. The data for this is available elsewhere, although the FCA has stated that removing this requirement will not eliminate the rule that firms must notify it of any such changes.
The FCA will take feedback on its proposals from interested parties until May 14. While this consultation period is ongoing, firms can choose not to submit the three returns earmarked for removal.
The FCA's chief data and information officer, Jessica Rusu, said: "We're getting rid of these data requests, saving time and money for thousands of firms, and we will review more in the future."
In the letter to the government, the FCA outlined dozens of ways that red tape could be cut. It committed to streamlining its handbook following industry input on rules that could be removed or simplified. It also said it would continue reducing reporting burdens for firms with the Bank of England and its Prudential Regulation Authority.
