Sentinel Regulatory Services news & information

The Financial Conduct Authority (“FCA”) has been fast out of the blocks in response to intense (some might say “desperate”) lobbying from His Majesty’s Government to help foster UK growth. The FCA’s strategic vision is entitled “Deepening Trust, Rebalancing Risk, Supporting Growth, Improving Lives.”  One thing we can conclude, judging by the FCA’s 22-page vision, is that Britain’s graphic design industry is in rude good health. It is a very slick vision but is it yet another example of style over substance?

The FCA’s Chief Executive, Nikhil Rathi, sets out his strategic vision, to be achieved by harnessing technology, which involves:

• Being a smarter regulator – more efficient and effective including rebalancing risk by – moving from the elimination of risk to enabling informed risk
• Supporting growth which is very laudable but how?
• Helping consumers navigate their financial lives
• Fighting financial crime

Sifting through the graphics, visions and statements, there are several interesting nuggets of information that begin to explain the FCA’s intentions, including some practical, substantive steps as follows:

• Plans to digitise and simplify the FCA’s authorisation processes making it easier to apply with reduced follow-up requests. Hopefully, making the entire process faster too.
• The FCA acknowledges in “Rebalancing risk” that its current risk assessment approach to new market entrants “can make it more difficult for new entrants.”  However, it remains light on detail here.
• The FCA will stop three regular data returns, benefitting 16,000 firms. It has also launched “My FCA,” a single-entry point for firms to simplify regulatory obligations. So, a promising start to help reduce firms’ regulatory burden.
• Examples of supporting growth include “changes to disclosure requirements, including the prospectus regime and widening retail access to investment opportunities making it easier for businesses to seek capital”
• An increasingly tech-positive approach, which has helped 200 firms test AI and machine learning technology.
• Reform rules and remove redundant requirements in the commercial insurance and asset management sectors.
• A review of mortgage affordability requirements to help first time buyers,

The wide scope of these proposed changes amply demonstrates the breadth of the FCA’s responsibilities and the challenges it faces. While it may feel like thin gruel to some, and unlikely to unleash growth, at least it is a start. We all have a vested interest in a healthy sector and an effective regulator focused on the major risks and intrusive where it most needs to be.