The Financial Conduct Authority (FCA) Business Plan for 2022/23 takes a different form to its predecessors. It's a shorter summary of priorities and planned activity that relies more on links to other sources, particularly the three-year strategy the regulator has also published today, and the Regulatory Initiatives Grid.
One visible differentiator of this new style is that the plan has ceased to be a standalone document. It's now a webpage with multiple hyperlinks.
Also gone are the sector-specific plans. This may make it harder for an individual firm to quickly identify what's relevant to them. In addition to our usual analysis of what the Plan means for business, we also set out our own guide to sector priorities.
The Business Plan can be seen as a transition away from the FCA’s traditional sector focus towards a more thematic approach, reflecting the regulator’s increasingly wide remit (to be extended again, with crypto and Buy Now Pay Later due to come within the regulatory perimeter).
Within the Plan itself there are few real surprises. This is largely because many of the initiatives it contains have been launched within the past year or so and are still in flight. In that sense the Plan avoids adding materially to the burden of regulatory change already reflected in the Grid.
The Plan frequently refers to the Future Regulatory Framework (FRF), where draft legislation is expected before the summer – giving the FCA a new secondary objective on competitiveness and growth and an additional regulatory principle on climate change and net zero. It will also reduce the role for legislation in the regulatory framework, putting more power to make rules in the hands of the FCA.
The Plan is organised around three focus areas. These are reflected in the new strategy and appear to be how the FCA will describe its priorities moving forward:
Within each of these themes the FCA have provided a narrative on the outcomes they intend to measure to assess their success, repeating prior commitments to hold itself accountable against published performance metrics.
The funding proposals show the ‘like-for-like’ budget increasing by a material 7.3%, with notable increases in spending on cryptoasset businesses and financial promotions. The total funding requirement grows by a more modest 4.3%, reflecting the end of some one-off budget items, such as EU withdrawal spend.
Without providing any new commitments, the Business Plan does set out four areas of focus for its internal transformation:
The budget earmarked for transformation is modest, raising questions on how much can be actually be achieved on what is an ambitious programme, especially for data. There's no mention this year of the FCA’s 2021/22 commitment to be more aggressive in testing the limits of its powers, an idea that did not seem to give rise to any discernible differences in practice.
Focus 1: reducing and preventing serious harm
Focus 2: setting and testing higher standards
Focus 3: Promoting competition and positive change
As this Plan does not categorise it's priorities by sector, we've created our own guide. Sectors that aren't mentioned here have not received specific attention from the FCA.
Long term savings and investments:
Banking and lending:
Finalise rules to prevent ‘phoenixing’ of firms to become claims management companies seeking Financial Services Compensation Scheme compensation for harm caused by their own prior activities