On 9 April 2018, the FCA published its Business Plan for 2018/19.
Chapter 2 of the Business Plan focuses on the FCA’s work regarding Brexit. Among other things the FCA states that it will ensure that there is an appropriate transition to a future model for authorisation and supervision of EEA firms. This will include implementing the legislation on the temporary permissions regime if necessary, as announced by HM Treasury in December 2017.
Chapter 4 of the Business Plan discusses cross-sector priorities. Highlights include:
- the FCA states that it intends to publish its Policy Statement on extending the senior managers’ regime this summer. It will also publish in the summer a Policy Statement concerning its proposals to introduce a public register;
- the FCA will take a broader look at all firms’ remuneration arrangements in 2018/19 to identify the potential or actual harm from the remuneration schemes of firms that are not subject to its Remuneration Codes;
- during the course of 2018/19 the FCA will strengthen its supervisory assessments of the highest impact firms to better understand their current and planned use of technology, resilience to cyber-attacks and staff expertise. The FCA will also review how governance, strategy, systems architecture, risk management and culture contribute to firms’ data security. The FCA will also conduct focused thematic work with ‘lower impact’ firms, based on harms the regulator has identified
- the FCA is focussing on outsourcing arrangements where the service provider supports many firms and therefore the impact of any disruption is magnified. Over 2018/19 the FCA will increase its understanding of both outsourced services and core infrastructure provision across different sectors through several pieces of thematic and firm-specific work. This will include diagnosing how firms use third parties, their concentration in the market and the potential harm that results;
- the FCA will publish in 2018 its final rules following its crowdfunding post-implementation review;
- the FCA will publish an update on its review of retail banking business models in the first half of 2018;
- in 2018/19 the FCA will publish a document outlining its ‘Approach to market integrity’ which will help firms and individuals to take responsibility for their part in maintaining clean, fair, effective and competitive markets;
- in 2018/19 the FCA will carry out a thematic review to increase its understanding and assessment of the harm caused by money laundering in capital markets;
- last year the FCA conducted work which assessed the effectiveness of primary markets. This work found that users of the IPO process are harmed because of a lack of timely and high-quality information during the IPO process. The FCA found that investor information is driven by ‘connected research’ which hampers the efficiency and integrity of the price formation process. Over 2018/19 the FCA will monitor firm compliance with new requirements to address conflicts of interest in producing connected research; and
- the FCA is assessing how inter-firm payments affect which credit products are offered to consumers and how they are sold. The FCA will report its findings towards the end of 2018.