On 10 January 2024, the FCA published its finalised rule review framework, which it has developed in line with an obligation introduced by the Financial Services and Markets Act 2023. The FCA consulted on its draft approach in July 2023 and its finalised framework reflects the feedback received.
The rule review framework explains how the FCA:
- Sets, measures and monitors the outcomes of its rules.
- Gathers metrics and qualitative intelligence to understand where there are significant concerns about a rule.
- Conducts a review if required.
The framework applies to all rules in the FCA Handbook, with some of the requirements on monitoring applying especially to new rules. The FCA notes, however, that as part of the framework’s initial implementation there may be some rules (such as those added to the Handbook shortly after publication of the framework) that do not fully meet all the requirements on monitoring. The FCA plans to explain adherence to the framework in relevant publications on rules, including consultation papers and policy statements.
The FCA notes that the rule review framework builds on its existing approaches to evaluation and adds new ways to better assess the effectiveness of Handbook rules. As well as monitoring and reviewing the rules, the FCA also intends to consider whether the framework is meeting its intended outcomes and make updates as needed.