FCA’s Business Plan 2023/24

1) Dealing with problem firms

• The FCA seeks to quickly remove firms from the market when they do not meet the Threshold Conditions. To achieve this, the regulator will:
• Prioritise action against the riskiest firms and those causing harm.
• Enhance proactive and data-led detection of problem firms.
• Conduct complex Threshold Conditions test cases.
• Act against more types of Threshold Conditions breaches.

2) Improving the redress framework

• The FCA wants to improve consumer outcomes when things go wrong by:
• Reviewing the rules on access to the Financial Ombudsman Service for small and medium-sized enterprises (SMEs).
• Consulting firms’ redress calculation guidance.
• Developing proposals to improve complaints reporting.
• Progressing the Compensation Framework review so that firms owing redress are more likely to bear the cost themselves.

3) Reducing harm from firm failure

The FCA wants firms to be financially resilient and, where applicable, wind-down without causing significant harm. They also want to ensure that client assets and funds are appropriately held.

Accordingly, the FCA will introduce a new regulatory return requiring 20,000 solo regulated firms to provide a baseline level of information about their financial resilience. This will help identify financial stress.

They also plan to:

• Publish findings from the IFPR implementation.
• Develop FCA policies for crypto assets.

4) Improving oversight of Appointed Representatives (ARs)

The regulator plans to assess the effectiveness of its new rules and guidance to improve principals’ oversight of ARs by:

• Testing how firms have embedded the new AR regime rules.
• Better utilising data from new gateway forms and regulatory returns.
• Considering further legislative changes or policy interventions.

5) Reducing and preventing financial crime

• The FCA continues to clamp down on money-laundering, Authorised Push Payment fraud and investment fraud. Planned includes:
• Increasing the volume of proactive assessments of firms’ Anti-Money Laundering systems and controls.
• Developing data-led analytical tools to assess which firms are susceptible to receiving the proceeds of fraud and to assess firms’ sanctions systems and controls.
• Supervising crypto asset firms’ compliance with the Money Laundering Regulations.

6) Delivering assertive action on market abuse

The FCA wants to build resilience to market abuse across primary and secondary markets to avoid the erosion of market integrity. The regulator will:

• Improve its capability to detect and prosecute fixed income and commodities market manipulation through improved data analytics and a dedicated non-equity team.
• Do further work on the transparency of Persons Discharging Management Responsibility.
• Deliver the Market Surveillance Refresh.

1) Putting consumer needs first

The FCA is focussed on achieving the outcomes set out under the Consumer Duty and will work towards this by:

• Reviewing debt advice rules to assess whether the framework provides good quality debt advice.
• Consulting on changes to mortgage, consumer credit and overdraft rules.
• Designing and delivering a robust regime for Deferred Payment Credit products, also known as Buy-Now-Pay-Later products.
• Consulting on rules to support the future of cash access once the Financial Services & Markets Bill has received Royal Assent.

 2) Enabling consumers to help themselves

The focus is on finding potential breaches and shutting down misleading promotions to reduce the risk of customers being mis-sold financial products and services. The FCA will:

• Introduce an application gateway for firms that want to approve financial promotions.
• Increase its technological capability to search across social media platforms to identify illegal financial promotions.

3) Environmental, Social and Governance (ESG) priorities

The FCA seeks to:

• Strengthen the quality of sustainability-related disclosures by consulting on changes to the Listing Rules.
• Provide a feedback statement on the Discussion Paper on ESG Governance.
• Publish rules on Sustainability Disclosure Requirements and investment labels as well as a net-zero transition plan.
• Deliver thought leadership as the co-chair of the International Organisation of Securities Commissions (IOSCO) Sustainable Finance Taskforce’s workstream on issuers’ sustainability disclosures.

4) Minimising the impact of operational disruptions

The regulator will work to ensure that firms’ important business services are resilient to operational disruption by:

• Assessing firms’ ability to remain within their impact tolerances ahead of the 31 March 2025 deadline.
• Clarifying how firms should report operational incidents to the FCA.

1) Preparing financial services for the future

Implementing the outcomes of the Future Regulatory Framework Review is a key change programme for the FCA in the year ahead. This will see the FCA progress toward the replacement of the Handbook requirements that came from EU law. Other work includes:

• Improving cost-benefit analysis frameworks.
• Following the new requirements for engaging parliamentary committees in consultations.
• Consulting on the new rule framework.
• Establishing the Listing Authority Advisory Panel as a statutory panel.
• Working on the programme outline announced in the Government’s Edinburgh reforms, which includes a review of the Senior Manager and Certification Regime (SM&CR).

2) Strengthening the UK’s position in global wholesale markets

The regulator wants to make sure the regulatory framework is clear, well understood and trusted by all market participants, and that it supports them in determining fair value. To help the UK remain one of the top markets of choice the FCA will:

• Update the regulatory framework and bring forward proposals for changes to the Markets in Financial Instruments Directive (MiFID) and Prospectus Regulation including a new public offer regime.
• Bring forward asset management regulation.
• Support the Financial Market Infrastructure Sandbox to test the use of Distributed Ledger Technology for settlement and trading.

3) Shaping digital markets to achieve good outcomes

The development of digital markets and the use of new technologies in financial products is fast-paced and the FCA wants this to lead to fair value for consumers and good outcomes.

The FCA will therefore continue to:

• Work with the Government and other stakeholders on the new pro-competition regime for digital markets.
• Publish a Feedback Statement to the Discussion Paper on Big Tech and artificial intelligence in financial services.
• Strengthen engagement with other UK regulators as a member of the Digital Regulation Cooperation Forum.
• Participate in the Joint Regulatory Oversight Committee on the Future of UK Open Banking.