opinion

COVID-19 regulatory spotlight: FCA Business Plan 2020

Gavin Stewart Gavin Stewart

This is the latest in a series of blogs looking at the impact on regulators with the intention of shedding light on a particularly significant regulatory event.

How you read the FCA Business Plan depends partly on your view of the duration of the COVID-19 crisis. But from a regulatory standpoint, its fallout is likely to dominate the Financial Conduct Authority's (FCA) agenda for the next two to three years. 

The reasons for this domination are broadly twofold:

1 COVID-19 will expose fissures in an FCA operating model that was designed in reaction to a different crisis

2 COVID-19 will reshape and partly repurpose parts of the industry, while stimulating its own national and global regulatory responses.

Today's regulatory spotlight blog turns to the regulator's one- to three-year priorities and briefly considers whether they are likely to be affected by the COVID-19 fallout.

1 Transforming how the FCA works

It's hard to see how the FCA will make much progress on this in the next year, with key people preoccupied and senior management bandwidth scarce

2 Enabling effective consumer investment decisions

This is likely to become an immediate priority as the immediate crisis recedes, and I'd anticipate a series of reviews being started by the autumn

3 Ensuring consumer credit markets work well

The credit market is likely to look quite different post COVID-19, requiring fresh analysis, and its prudential regulation will become more of a priority

4 Making payments safe and accessible

With its emphasis on safety and quality, this seems well aligned with the likely demands of the new landscape

5 Delivering fair value in a digital age

This is a critical area, where firms have just as much interest and, reflecting accelerating industry trends, will become an FCA priority for the foreseeable future

The FCA's cross-cutting priorities will need to continue as best they can, their agendas are largely laid out already, and they will regain impetus towards the end of the year. Because they will have become more central due to the COVID-19 crisis, operational resilience and financial crime (scams) will be the first off the rank.

FCA sets out priorities for 2020/21 (7th April 2020)