Of Relevance to:
To all firms
FCA Business Plan: 2016/17
The FCA has published its Business Plan for 2016/17, which also includes the ‘Risk Outlook’ (page 12) which effectively feeds into the Business Plan. The purpose of the Plan is to set out the FCA’s priorities for the year ahead.
In keeping with last year’s Business Plan, there is again a focus on seven priority themes (most of which will be familiar):
- Firms’ culture and governance
The Senior Managers and Certification Regime (although SUP 10C is currently only applicable to dual regulated firms, the concept will be rolled out to all firms during 2018 – see Regulatory Roundup 69) will be embedded in the FCA’s supervisory approach and process. Outcomes that the Regulator will be looking for include senior management being able to explain principles of good conduct and an expectation that firms continue to identify – and address – the risks inherent in their strategies, business models and cultures.
- Financial Crime and Anti-money laundering
The FCA will continue to ensure that firms’ systems and controls are sufficient to combat financial crime and money laundering and will continue to roll out the Financial Crime Annual Data Return. This new return (‘REP-CRIM’) was proposed in Quarterly Consultation CP15/42 and is scheduled to come into force on 31 December 2016. A dedicated new section (SUP 16.22) will be inserted into the Handbook.
- Wholesale financial markets
Aside from the implementation of the Market Abuse Regulation, the FCA will work to ensure the successful implementation of MiFID II with the promise of further consultation papers addressing conduct of business and organisational requirements. The Regulator will also continue its market study into asset management to assess if competition is working and whether investors ‘get value for money’ (see Regulatory Roundup 70).
The FCA will work on implementing the recommendations contained within the Financial Advice Market Review (‘FAMR‘) – see Regulatory Roundup 74) as well as developing clear policies to support the development of the advice market.
- Treatment of existing customers
It is anticipated that the Competition and Markets Authority report on retail banking (final report expected this summer) may make recommendations to the FCA to implement a number of the final proposals.
- Innovation and Technology
It is confirmed that the ‘Regulatory Sandbox’ – being part of Project Innovate (see Regulatory Roundup 70) – will be launched to allow firms to test new ideas to ensure that they meet regulatory requirements. Elsewhere, the FCA will continue to monitor automated advisory services (‘robo advice’); the FCA has accepted FAMR’s recommendation to create an ‘Advice Unit’ to support firms with automated advice models.
A review on Retirement Options will be launched to consider the impact of the pension reforms on competition and switching in the market. With the increasing use of drawdown and encashment of pension pots the FCA will undertake work to ensure that consumers are able to make choices that are in their best interests.
The above is a summary and those with a particular interest in any of the priority themes should refer to the Business Plan for the detail.