As the Financial Conduct Authority (FCA) looks to establish its presence overseas to support inward investment to the UK, we lead this week with a reminder of one of its more fundamental and longstanding priorities. Talking to an audience in New York, the FCA’s joint executive director of enforcement and market oversight took the opportunity to reinforce the purpose of enforcement action – that is, visible and timely deterrence for misconduct. And this now reflects an intentional trend towards fewer, faster investigations.
Our second item exemplifies the FCA’s drive to become a “smarter” regulator, by streamlining data collection and improving its interactions with firms. However, some observers might question the likely impact and focus of this latest consultation.
Elsewhere, we highlight valuable insights from the recent muti-firm review relating to retail banks’ treatment of customers in vulnerable circumstances, here around bereavement and power of attorney.
We round off this week with the latest detailed consultation covering additional proposals for a new product information regime for Consumer Composite Investments (CCIs), aligned to the desire for simpler and higher quality disclosures.
The FCA has recently shared insights from Therese Chambers' speech at NYU’s Program on Corporate Compliance and Enforcement Spring Conference. Therese, the Joint Executive Director of Enforcement and Market Oversight, outlined the FCA's enforcement priorities for the next five years and emphasised the importance of the UK market for US firms, highlighting London's role as an international financial centre and the need for attention to UK regulations.
The FCA's primary focus areas include preventing dirty money from entering the financial system, tackling fraud within regulated firms, and safeguarding the integrity of UK markets. The FCA is committed to acting swiftly and transparently, with recent investigations achieving outcomes in record time. This approach ensures that enforcement actions are timely and visible, effectively deterring misconduct.
Additionally, the FCA is dedicated to developing a safe and competitive crypto regime that protects consumers while fostering innovation. Collaborative efforts with international partners, particularly in the US, are crucial in addressing the complex challenges faced today.
Therese made it clear that through robust enforcement and international cooperation, the FCA aims to create a fair, transparent, and trustworthy financial environment, continuing to foster cooperation between the FCA and US partners.
Read more on the FCA’s enforcement priorities
The FCA recently released Consultation Paper CP25/8 which proposes to streamline regulatory reporting for insurance intermediaries, mortgage brokers, retail investment firms, MIFIDPRU investment firms and asset managers. This initiative is part of the wider Transforming Data Collection programme, which aims to reduce unnecessary reporting burdens and improve the efficiency of data collection across the UK financial sector.
The plans are to remove three specific data submissions:
The FCA considers these returns to be duplicative or of limited supervisory value. In addition, it proposes to delete outdated guidance and references, including those related to the European Economic Area (EEA), and streamline the FCA Handbook by removing more than 140 pages of redundant content.
The FCA is inviting comments by 14 May 2025 and plans to publish a policy statement finalising the rules later this year.
Read more on CP25/8: Data Decommissioning
Having recently reviewed how firms are supporting customers in vulnerable circumstances, the FCA has published good practice guidance for the retail banking sector. In particular, the regulator examined how banks and building societies handle customer bereavement and power of attorney, and has now provided its findings and areas for improvement.
The regulator found that, overall, firms within the sector have taken positive steps to refine their vulnerable customer approach since the introduction of the Consumer Duty. Firms largely have clear vulnerable customer policies and procedures, which are accessible to staff and provide guidance on responding to the support needs of vulnerable customers. Some firms have taken a proactive approach to detecting potentially vulnerable customers, employing tools such as AI and transaction pattern data to identify customers who may have characteristics of vulnerability. Firms have even developed systems which enable customers themselves to disclose their needs, which staff can then view by accessing the customer’s profile.
However, the review also flagged areas for improvement. While systems have been created to allow customers to disclose their needs, the FCA observed instances of staff failing to use these systems or respond to support needs recorded on a customer's profile. In some bereavement cases, the regulator found that staff did not acknowledge that customers were noticeably distressed and upset, and suggests that staff should be provided with additional training to recognise potential support needs.
Read more on the retail banks’ treatment of customers in vulnerable circumstances
The FCA has recently conducted a multi-firm review to assess how banks and building societies handle bereavement and power of attorney policies. The findings reveal that while some institutions have made significant improvements since the introductions of Consumer Duty, others still struggle to provide adequate support to customers during these challenging times.
The FCA emphasises the importance of clear policies and procedures to ensure vulnerable customers receive the necessary assistance. This should help staff be clear on what actions are necessary so that delays and difficulties are avoided, especially when timeliness is critical.
Read more on the FCA probe on banks on bereavement and power of attorney policies
UK Regulatory Handbook 2024
An essential guide to the regulatory landscape for financial services
