The FCA has published its latest annual Business Plan (2016/17).
The Business Plan outlines seven priority themes:
- The FCA expects to launch a review on retirement outcomes this year which will consider the impact of recent pensions reforms on competition and switching in the market. It will also consult on proposals to discharge the duty given to it by Parliament to impose a cap on early exit charges. The FCA will also continue to review firms’ disclosures to existing customers about enhanced annuities through their non-advised sales processes. It will also work with HM Treasury, among others, to create a consumer protection model for the secondary annuities market which is scheduled for April 2017;
- financial crime and anti-money laundering. The FCA will roll out a Financial Crime Annual Data Return and will work closely with HM Treasury on the Fourth Anti-Money Laundering Directive which requires implementation in the UK by mid-2017. The FCA will complete its de-risking impact assessment in Q1 2016 and will work with the Government to create a proportionate strategic response;
- wholesale financial markets. In 2016 the FCA will finish implementing, and start applying, the Market Abuse Regulation. The FCA’s work will also include supervising the major fixed income, currencies and commodities benchmarks that are now regulated as a result of the recommendations of the Fair and Effective Markets Review. The FCA notes that the European Commission has proposed that the date from which MiFID II and MiFIR will apply should be pushed back by a year to January 2018. It states that it will publish further consultation papers, following on from CP15/43, to make the necessary changes to its Handbook, primarily to add new conduct of business and organisational requirements. An interim report on the asset management market study is expected in summer 2016 and a final report in early 2017;
- The FCA’s supervisory focus will continue to be on supporting increased professionalism in the financial advice sector. The FCA will increase its communications with the sector and continue to assess how suitable advice is, monitoring any changes that result from implementing proposals from the Financial Advice Market Review (FAMR);
- innovation and technology. The FCA will use the results from its call for input on “RegTech” to shape its strategy to reduce the regulatory burden on firms. It will also use the results from its call for input on Big Data use in the general insurance sector to better understand how Big Data affects customers and whether it fosters competition. The FCA has also accepted the FAMR’s recommendation to create an ‘Advice Unit’ to support firms with automated advice models with the potential to deliver affordable and accessible financial advice to customers;
- firms’ culture and governance. The FCA will continue to embed the new senior managers’ regime into its supervisory approach and processes. The focus on culture in financial services firms remains a priority and will continue to look at the most significant drivers of good or poor mind sets and behaviours, such as incentives and remuneration. The FCA is interested in the direction of travel of firms’ cultures and if indicators show progress; and
- the treatment of existing customers. The Competition and Markets Authority is expected to publish its final report on its retail banking investigation this summer and its provisional decision on remedies in May. Following its cash savings market study the FCA is developing a package of remedies to deliver improved customer awareness about the interest rates on their accounts, their providers’ strategies to long standing customers and to encourage more shopping around. The FCA will also consult on a second package of remedies to improve transparency and increase shopping around and switching.
View FCA publishes 2016/17 Business Plan, 5 April 2016