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FCA’s Business Plan is food for thought for all regulated firms

With the uncertainty of Brexit playing out amid the backdrop of a rapidly-changing regulatory landscape, the Financial Conduct Authority’s (FCA) business plan for 2018/19 is one of the most anticipated publications to date. The purpose of the document is to outline the key regulatory priorities for the coming year, in line with the FCA’s ‘mission’ statement and its operational objectives. The plan shines a powerful spotlight on the key issues in the sector – and it is for this reason that all decision-makers coming under the scope of the FCA should ensure they take some time to read it.

Leading the agenda is Britain’s withdrawal from the EU. Unsurprisingly, it is a key focus for the FCA as it works collaboratively with the Government, regulatory bodies from across the EU and regulated firms to ensure there is a sufficiently high level of resource dedicated to operational readiness ahead of the transition.

It is interesting to see that a number of recurring themes are once again at the top of the list. Culture and governance within business remain a priority, and now even more so, considering the fast-approaching extension of the Senior Manager & Certification Regime (SM&CR) to all firms. The prevention of financial crime and making the UK financial markets a hostile place for criminals and a safe place for consumers also feature prominently in this business plan.

There are, however, several new items due to the recent evolution of the financial sector with new business models being introduced thanks to technological innovation, as well as the additional legislation around payment services, data protection and cybersecurity.

Sector specific priorities

In addition to the overall set of priorities that the FCA has established for the whole financial sector, it has also identified more specific objectives and remedies targeted at the following areas:

  • wholesale financial markets.
  • investment management.
  • retail lending;
  • pensions and retirement income;
  • retail investments;
  • retail banking;
  • general insurance and protection.

Many of the FCA’s concerns in these specific sectors reflect their view of the issues that affect the financial markets cross-sector as outlined above.

Financial crime and anti-money laundering

This summer the FCA is expected to share the results of its review within the e-money sector. Furthermore, 2018/19 will see the FCA conduct a thematic review to better understand how capital markets are being used for money laundering.

The FCA will conduct random sampling of small and lower-risk organisations to ensure the accuracy of its risk assessments of firms across the sectors and, additionally, that high standards of controls around money laundering are being robustly maintained.

Significance for all FCA-regulated businesses

Decision-makers should see this as a helpful document as it identifies common issues for both consumers and firms, but also offers remedial measures to overcome those issues. Thus, operators in industry will be able to benefit from arming themselves with the information.

Crucially, the FCA’s business plan must be taken in due account by all firms, large or small, national or regional. It boils down to this summation – that risk factors posed to businesses and consumers must be comprehensively assessed and, following this review process, appropriate measures implemented to ensure regulated firms operate within the FCA’s guidelines.

It is clear that the regulator’s thematic work will continue and be used to analyse trends and developments in industry, but may also result in the identification of shortcomings that could be regarded as breaches and be punished accordingly. To see the FCA’s business plan click here.

At HWB we act for FCA-registered business and have knowledge and industry know-how on the strict reporting regimes that need to be followed. As specialists in advising finance professionals, we understand the impact of these complex regulatory frameworks and pride ourselves on providing clear, intelligent and economical solutions.

For an informal discussion or to arrange a free introductory meeting, please call me on 023 8046 1201 or email alan.williams@hwb-accountants.com

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