Your guide to this week in regulation

As the end of the year fast approaches, so too does the FCA’s current strategy. And so, this week we lead with a recent key speech as the regulator looks to signal the major themes as part of its new five-year strategy to 2030. The detail will follow in due course, but for now the headlines are largely predictable around supporting growth, consumer resilience, and addressing financial crime. 

Building on the latter key theme, our second item highlights recent changes to the FCA’s Financial Crime Guide, including reference to cryptoasset businesses that will soon be brought into the regulatory perimeter more comprehensively. 

We also highlight the long-awaited updated consultation on FCA enforcement, including certain key concessions following much industry feedback. 

And we round up this week with the latest developments on the strong and simple framework aligned to proportionate regulation, and proposals for fees and levies into 2026. 

FCA speech on strategy for 2025 to 2030 

The FCA’s Chief Operating Officer, Emily Shepperd, delivered a speech outlining the FCA’s new five-year strategy, which focused on four key themes: 

1. Becoming a more efficient and effective regulator – The FCA pledges to become more efficient, effective, and proportionate in its regulatory actions by rethinking supervisory practices and leveraging technology to automate routine tasks.
2. Tackling financial crime – The strategy will reinforce the FCA’s partnership with the wider national system and will also look internationally to combat financial crime by increasing data-sharing and deploying more data analytics.
3. Building consumer resilience –The FCA aims to refine the line between advice and guidance to help consumers understand their choices, build trust through greater consumer understanding, and focus on financial inclusion.
4. Supporting economic growth and innovation – The strategy seeks to facilitate growth by reducing regulatory costs, supporting new business models, and facilitating investment in the real economy. 

The FCA has consulted a wide range of stakeholders to help shape its new strategy, in line with how it intends to deliver it. 

Read FCA speech on its strategy for 2025 to 2030 

FCA policy statement on changes to Financial Crime Guide  

Following its consultation on proposed changes to its Financial Crime Guide earlier this year, the FCA has now published its Policy Statement PS24/17, which includes the feedback to the initial consultation, alongside the finalised changes.  

The changes to the Financial Crime Guide are intended to ensure it remains a valuable resource for firms by helping them to understand what the FCA expects, assess the adequacy of their financial crime systems and controls, and remedy deficiencies. 

 The key changes to the guide relate to: 

• sanctions
• proliferation financing
• cryptossset businesses 
• transaction monitoring
• Consumer Duty

Firms affected by these changes will need to consider what adjustments may be needed to their financial crime systems and controls.  

Read more on the FCA's Financial Crime Guide updates

FCA further consultation on greater transparency of enforcement investigations 

In February 2024, the FCA consulted on changes to its Enforcement Guide with a view to bringing an increased focus, pace, and transparency to investigations. The regulator has published a further consultation following receipt of feedback with some significant changes to its initial proposals: 

1. The impact of an announcement on the relevant firm would form part of the FCA’s public interest test and be central to its consideration of whether to announce an investigation and name the firm.
2. Giving firms 10 business days' notice of an announcement, with a further two days' notice if, following this, the FCA decides to go ahead and announce. This is instead of the originally proposed one day’s notice to give firms more time to make representations.
3. FCA public-interest test to include assessing the degree to which an announcement could seriously disrupt public confidence in the financial system or the market.
4. The FCA won't make proactive announcements of investigations that are ongoing when the proposals come into effect, although it may reactively confirm ongoing investigations that are already in the public domain, where it considers this to be in the public interest.

The FCA has invited any comments to its revised approach by 17 February 2025. 

Read more on the FCA's enforcement guide and publicising enforcement investigations

PRA policy statement on definition of ICR firm under strong and simple framework  

The PRA recently issued policy statement PS19/24 on Operating the Capital Regime, following the consultation paper CP16/22 on the Implementation of Basel 3.1 standards. PS19/24 outlines the PRA's discretion to remove firms meeting the SDDT criteria from the Interim Capital Regime, stating that the PRA will consider revoking a firm's modification direction if its inclusion in the regime doesn't advance the PRA's statutory objectives. Additionally, the PRA may treat firms that are members of foreign groups in a similar manner to those that satisfy all the SDDT criteria, depending on the size of the foreign group.  
Some key dates to note are: 

• New rules defining ICR firms and outlining the process for eligible firms and consolidation entities to become ICR firms and ICR consolidation entities will take effect from 29 November 2024.
• Final rules for reproduced CRR provisions and technical standards will be published in the first quarter of 2025.

Read more on PS19/24 – Strong and Simple Framework

FCA consults on policy proposals for regulatory fees and levies for 2025/26

The FCA has launched a consultation on proposed changes to the way it will raise its fees from 2025/26, and the way it will collect levies payable to the Financial Ombudsman Service (‘FOS’) and the Financial Services Compensations Scheme (‘FSCS’). This consultation, which opened on 29 November 2024, will remain open for feedback until 24 January 2025. The aim is to gather insights from various stakeholders, including all FCA fee-payers, levy-payers of the FOS and of the FSCS, and businesses considering applying for FCA authorisation or registration. While this document isn't directly relevant to retail financial services consumers, these fees are indirectly paid by financial-services users.  

The consultation includes 10 questions, allowing stakeholders to voice their opinions on the proposed changes. Interested parties can participate through an online response form provided in the consultation paper.

Read more on CP25/26