On 10 December 2024, the Financial Conduct Authority (FCA) published a letter from its chief executive Nikhil Rathi and chair Ashley Alder, responding to HM Treasury’s (HMT) remit letter sent in November 2024.

In its response, the FCA thanks HMT for providing it with clear recommendations for aspects of the Government’s economic policy to which it should have regard when delivering on its objectives. The FCA confirms that it will report on progress within a year, as it is required to do by statute, but in the meantime it sets out in the letter how it is supporting growth, the development of its next strategy, its international role and its approach to risk.

Growth

The letter outlines some of the measures the FCA has delivered to support growth since the new Government took office, and highlighted further actions it plans to take in the coming months, including:

  • Concluding far-reaching reforms to secondary capital raising and consulting on a new type of market for private company shares (PISCES).
  • Setting out steps to streamline the FCA Handbook, following its call for input which generated mixed views and over 170 responses.
  • Consulting on proposed targeted support for pensions, followed by broader proposals for retail investments, both of which seek to help customers be better able to access appropriate advice.

The FCA’s strategy for 2025-2030

In relation to the FCA’s next strategy, covering the period 2025-2030, the FCA flags that its priorities will include:

  • Supporting the growth of the financial services sector and the UK economy.
  • Tackling financial crime.
  • Enabling people to make the most of their money through a focus on consumer resilience.
  • Further strengthening the FCA’s operational effectiveness and efficiency.

The UK’s international leadership

The FCA notes that it agrees with HMT that, to successfully deliver the next strategy, it must maintain its leading role with global partners and in international fora. It explains that it will advocate for global cooperation and openness but may choose initially, on some issues, to make progress with a “smaller group of like-minded jurisdictions”.

Risk

On risk, the FCA welcomes HMT’s commitment to support it as it seeks to facilitate more informed and responsible risk-taking by authorised firms and consumers. The letter highlights some of the difficulties around this and notes that, as the FCA progresses its next strategy, it hopes to agree on an ambitious set of performance metrics for the system as a whole and be held to account against those, recognising individual things will go wrong in a system where there is a desire for more risk.