On 20 July 2023, the FCA published an updated version of its perimeter report, which was previously published in March 2023.
The updated report includes a section on the Financial Services and Markets Act 2023, which received Royal Assent on 29 June 2023. The FCA notes that the Act includes various measures that will affect its remit and responsibilities, including:
- Providing for the repeal of financial services related provisions in retained EU law, enabling regulators, through new rule-making powers, to make rules to replace those provisions. This means the FCA will be responsible for maintaining those rules in the future, adapting them as appropriate to the needs of UK markets and consumers.
- The new Designated Activities Regime (DAR), which will enable HM Treasury to ‘designate’ activities, and to confer rule-making, supervisory and enforcement powers to the FCA over them. The report notes that initially, HM Treasury will designate activities to enable the FCA to make rules to replace relevant provisions in retained EU law that are being repealed under the Act. However, use of the DAR is not restricted to these activities, and HM Treasury will be able to designate further activities in future. The FCA states that this will ensure the regulatory framework and perimeter can adapt, for example, for new types of activity where the risks associated with a particular activity change in a way that merits bringing it within scope of regulation, but where authorisation would be disproportionate. Designating activities beyond the current scope of retained EU law would expand the FCA’s remit and regulatory perimeter.
Among the other updates to the report is a note that the FCA intends to publish its policy statement on how it will operationalise the new regulatory ‘gateway’ for financial promotions (introduced under the Act) by the end of 2023.