The FCA has published its Business Plan for the 2020/2021 financial year. The headlines are as follows:
Unsurprisingly, the FCA’s highest priority is to deal with the hugely significant implications of COVID-19. The Business Plan contains a clear statement that the FCA will not compromise its expectations of firms’ conduct, particularly with respect to protecting the interests of consumers.
Unlike regulators in some jurisdictions, the FCA has confirmed that it will not impose a ban on short selling amid the pandemic. However, the Business Plan contains a stark warning that the FCA remains vigilant to market misconduct and will bring enforcement action against firms/individuals where appropriate:
“There may be some who see these times as an opportunity for poor behaviour – including market abuse, capitalising on investors’ concerns or reneging on commitments to consumers.
Where we find poor practice, we will clamp down with all relevant force.”
The Business Plan sets out four external priority areas where the FCA will address continuing harm: (i) enabling effective consumer investment decisions; (ii) ensuring consumer credit markets work well; (iii) making payments safe and accessible; and (iv) delivering fair value in a digital age.
In addition, the FCA has identified its own transformation as a fifth priority. It has highlighted the need to:
- make faster, more effective decisions;
- focus on outcomes rather than narrow compliance; and
- act in an integrated way across the organisation.
This is a new and welcome development.
In the area of enforcement, the FCA confirms that financial crime and culture continue to be priority areas. The Business Plan says that in assessing firms, the FCA will continue to focus on the four key culture drivers in firms (purpose, leadership, approach to rewarding and managing people and governance) and their effectiveness.
The FCA has confirmed that it will freeze the fees to be paid by the smallest 71% of financial services firms for the 2020/2021 financial year and provide small and medium firms with an extended period to pay. The FCA has also published a consultation paper on its proposed regulatory fees and levies, which is open for responses until 19 May 2020.
We will remain vigilant to potential misconduct. There may be some who see these times as an opportunity for poor behaviour – including market abuse, capitalising on investors’ concerns or reneging on commitments to consumers. Where we find poor practice, we will clamp down with all relevant force.