2023/24 Outlook: Regulatory Framework and Consumer Duty must-knows for UK financial firms
The Financial Conduct Authority (FCA) has unveiled its Business Plan for 2023/24, which highlights the key priorities for the UK financial firms regulated by the FCA. These include preparing for the future, strengthening the UK's position in global wholesale markets, putting consumers' needs first, and reducing and preventing financial crime.
The Financial Conduct Authority (FCA) has published its Business Plan for 2023/24, setting out its priorities for the year ahead. The plan focuses on four main priority areas: preparing financial services for the future, strengthening the UK's position in global wholesale markets, putting consumers' needs first, and reducing and preventing financial crime. In this article, we'll take a closer look at what these priorities mean for UK financial firms regulated by the FCA.
Preparing Financial Services for the future
The FCA plans to work with the HM Treasury to advance the Future Regulatory Framework Review, which involves replacing large amounts of retained EU legislation with FCA rules. This is expected to be a significant programme of work against a demanding timetable, with the FCA investing £12.7 million into the Future Regulatory Framework over the next year. Firms will need to be prepared to quickly review and comment on proposals.
Strengthening the UK's position in global wholesale markets
The FCA’s aim is to ensure that the UK continues to be seen as a leading global market, as well as to strengthen the country’s ability to respond to market volatility. It plans to publish further proposals for changes to MiFID II, the Prospectus Regulation, the Securitisation Regulation, and the Short Selling Regulation, and to see what improvements it can make to asset management regulation. Firms should be aware of these changes and be prepared to adapt their processes accordingly.
Putting consumers' needs first
The Consumer Duty, which takes effect on 31 July 2023, is a key priority for the FCA. The FCA will invest significant resources to ensure the Duty is implemented and embedded effectively. It plans to consult on changes to its mortgage, consumer credit, and overdraft rules to improve outcomes for consumers in financial difficulties. It will also design regulatory rules for providers of buy-now-pay-later products. Firms should ensure that they are compliant with the Consumer Duty and are putting consumers' needs first.
Reducing and preventing financial crime
The FCA's focus here is on preventing scams and fraud, and protecting consumers against the harm that these can cause. It plans to raise standards by working on a strengthened authorisation process, improving assessments of regulated firms, and dedicating more staff to investigating and prosecuting offenders. Firms should ensure that they have robust anti-money laundering systems and controls in place.
Other areas of focus
The FCA's Business Plan for 2023/24 also covers other priority areas, including ESG, market abuse, financial resilience, financial promotions, operational resilience, and the regulatory gateway. Firms should be aware of these areas and take any necessary actions to ensure compliance.
What UK financial firms need to do
UK financial firms regulated by the FCA should review the FCA's Business Plan for 2023/24 and ensure that they are prepared for any changes or initiatives that may affect them. Firms should also review their processes and systems to ensure that they are compliant with any new or existing regulations.
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