On 5 April 2023, the FCA published its Business Plan for 2023/24, setting out the work it will do over the next 12 months to help deliver its commitments in the second year of its 3-year strategy.

The Business Plan notes that, while there are some positive developments in the UK economy, the FCA expects the economic and geopolitical environment to remain highly uncertain over the year ahead, including a heightened risk of firm failure. Key uncertainties identified include interest rates and inflation, the risk of unemployment increasing more than currently projected, the potential for further declines in real household disposable incomes, and the potential for further market volatility.

The FCA’s strategy, which it published last year, is designed to be flexible and with the changing economic picture, the FCA is accelerating its work in the following four areas over the next year through further investment and increased resources:

Putting consumers’ needs first

In light of the rising cost of living, the FCA will continue to prioritise protecting people from unfair treatment, with more staff allocated to ensure firms support consumers who are struggling financially.  In addition, the Consumer Duty, which will come into force in July 2023, will play a leading role in meeting the FCA’s objective of putting customers’ needs first. The FCA has committed to providing additional resources to make sure the transition is smooth for both consumers and firms. As well as benefiting consumers by setting higher and clearer standards of consumer protection, the FCA aims to use the Duty to encourage more innovation and competition, as it could lead to a more simplified approach to regulation.

Preparing financial services for the future

The FCA plans to continue its urgent work with its partners and deliver the outcomes of the new future regulatory framework (FRF) and Edinburgh Reforms. More than £12 million will be invested to prepare for the FRF, which is intended to help support the UK’s wider economic growth and international competitiveness, in line with the FCA’s new secondary objective. The FCA will also continue to support innovative and high growth firms, including through its sandbox and its ‘early and high growth’ oversight function. New cost benefit analysis panels will be established to support the effectiveness of the FCA’s programme of work.

Strengthening the UK’s position in global wholesale markets

To make the UK a more attractive place for business, the FCA will set out further proposals to reform the listing regime to attract world-leading firms and encourage competition. The FCA also wants to use the opportunity provided by the FRF to see if improvements can be made to asset management regulation. It is already seeking views and will bring forward proposals, based on the feedback it receives, later this year.

As part of the Edinburgh Reforms, the FCA will consult this year on consolidated tapes, with the aim of improving the overall cost, quality and accessibility of wholesale data. Consolidated tapes take data from across the wholesale market and distribute it in single, standardised feeds.

Reducing and preventing financial crime

The FCA continues to look for innovative ways of reducing and preventing financial crime, as it harms confidence and integrity in the UK’s market and puts consumers’ money at risk. This includes a strengthened authorisation process, improved assessments of regulated firms and more staff to investigate and prosecute offenders. Alongside this, the FCA continues to develop tools to find scam sites and is already using machine learning and other tools to find and remove scams.

Much of the work to deliver on its commitments is well underway and the FCA wants to prioritise its work to bring the most benefits to consumers, firms and the wider economy. Later this year, the FCA will publish the first set of results against the outcomes and performance metrics included in its strategy.

The FCA has also published the consultation on its fees and levies for the year ahead. In recognition of the pressure firms are under, the FCA is proposing to freeze application fees and the minimum fees firm pay which affects more than 17,000 FCA-regulated firms.