FCA business plan in brief

21 March 2024 | UK & Europe | Articles

In its 2024-25 Business Plan, the FCA outlines its ambitious goals to enhance outcomes for consumers and markets in its final year of a three-year strategy. Continuing to focus on preventing harm, raising standards, and promoting competition, the FCA aims to achieve these goals through various initiatives:

1. Protecting consumers by enforcing the Consumer Duty, ensuring long-term financial wellbeing, and ensuring pension products offer value for money.
2. Supporting UK competitiveness and growth by enhancing wholesale markets, facilitating firm investment and innovation, and streamlining authorisation processes.
3. Advancing as a world-class data-led regulator by automating analytics tools and collaborating with firms on AI deployment.

The FCA will continue to deliver on their 13 public commitments[1], with a focus on the following three commitments during 2024/25:

1. Reducing and preventing financial crime
2. Putting consumers’ needs first
3. Strengthening the UK’s position in global wholesale markets

Commitment 1: Reducing and preventing financial crime

Over the past year, two key national strategic documents, the Economic Crime Plan (March 2023) and the Fraud Strategy (May 2023), have been released. While the FCA aims to reduce and stop all areas of financial crime, there has been a focus on reducing the growth of fraud cases, specifically related to investment fraud and Authorised Push Payment (APP) fraud.

To decrease the instances of money laundering, the FCA will continue to work with partners, including the National Economic Crime Centre (NECC) and the Office for Professional Body Anti-Money Laundering Supervision (OPBAS), to strengthen their proactive supervisory approach.

The FCA will maintain a data-driven approach to identify potential harm, taking decisive action against scams and fraudulent activities. For 2024/2025, the FCA will focus on its investment in systems to leverage intelligence and data more effectively in combating financial crime.

Commitment 2: Putting consumers’ needs first

The introduction of the Consumer Duty has set clearer standards for consumer protection, prompting changes in savings rates and fees by firms. The FCA will continue to conduct supervisory work to test firms’ implementation of the Consumer Duty and improve firms’ delivery of good customer outcomes.

This year, the FCA’s focus will encompass multi-firm work and market studies spanning various sectors to elevate standards. For instance, examinations of unit-linked pensions and long-term savings products will gauge charge transparency across value chains, firms’ evaluation of overall product value, and their actions upon identifying unfair value. In addition, a review will be conducted to assess how firms handle customers in vulnerable circumstances.

The FCA’s wider work also includes  ensuring a cross-sector response to cost of living pressures, financial inclusion, access to cash and addressing consumer difficulties in accessing the financial products and services they need.

Commitment 3: Strengthening the UK’s position in global wholesale markets

The FCA has revised rules and processes to maintain the UK’s attractiveness for investment, proposing significant reforms to the listing regime. By doubling efforts to combat misleading adverts and unauthorised firms, and increasing enforcement actions, the FCA aims to ensure market integrity and protect consumers while fostering a vibrant financial sector in the UK.

Moreover, the FCA is focused on delivering its ambitious Primary Market policy reforms and consulting on changes to investment research payment options. They are also ensuring venue resilience during extreme events by proposing a commodity position limits regime.

Additionally, the FCA is preparing derivative markets for new reporting rules under UK EMIR and overseeing the transition away from LIBOR. They support innovation, including initiatives like the Digital Securities Sandbox and a new intermittent trading platform.

The FCA is assisting asset management groups with tokenization efforts and refining the regulatory framework to ensuring a proportionate regulatory framework. The regulator is   also streamlining authorization processes for funds, firms, and individuals to enhance efficiency.

Internally, the FCA is strengthening its capabilities to predict and respond to market volatility and enhancing market integrity through increased monitoring of fixed income and commodities.

Other notable updates to Commitments 4-13

Environmental, social and governance (ESG priorities)

The FCA’s focus on ESG includes integrating Sustainability Disclosure Requirements and Investment Labels, and expanding the regime with a focus on Portfolio Management. The FCA is advancing its efforts on Transition Finance and is preparing to incorporate a ‘Nature’ regulatory principle.

Minimising the impact of operational disruptions

Due to increased operational resilience risks and cyber threats, the FCA have set a deadline for 31 March 2025, requiring larger firms in scope of PS21/3 to ensure the continuity of vital business services without causing intolerable harm to consumers and markets.

[1] 1) Preparing financial services for the future; 2) Dealing with problem firms; 3) Taking assertive action on market abuse; 4) Reducing harm from firm failure; 5) Our environmental, social, and governance (ESG) priorities; 6) Shaping digital markets to achieve good outcomes; 7) Improving the redress framework; 8) Enabling consumers to help themselves; 9) Minimizing the impact of operational disruptions; 10) Improving oversight of Appointed Representatives; 11) Reducing and preventing financial crime; 12) Putting consumers’ needs first; 13) Strengthening the UK’s position in global wholesale markets