On 31 March 2014, the FCA published its Business Plan for 2014/15, which sets out the activities the FCA intends to carry out during the period to ensure that it meets its statutory objectives of protecting consumers, enhancing market integrity and promoting competition.
We have captured the key activities, proposed thematic reviews and expectations by the regulator relevant to our clients below.
Protecting consumers
Enhancing market integrity
Building competitive markets
Complete various market studies to analyze competition and weaknesses in the markets, including cash savings accounts and retirement income products;
Conduct initial assessments of competition issues in wholesale markets; and
Preparing for April 2015 when the FCA will become a concurrent regulator with the Competition and Markets Authority (CMA) to enforce competition law in financial services.
Regulating consumer credit
A new responsibility and major focus as the FCA takes over the regulation of the £200 billion consumer credit market from the Office of Fair Trading, as well as effectively doubling the number of firms regulated by the FCA; and
Implement the new Senior Managers and Certified Persons regime for those involved in deposit-taking institutions, to improve accountability of individuals in positions of responsibility, as set out in the Financial Services (Banking Reform) Act 2013.
On the same day, the FCA also published its Risk Outlook 2014 which sets out the regulator’s forward-looking view on the main drivers of risks to its statutory objectives, as well as risks on which the regulator is to focus.
In Part A of the Risk Outlook, the FCA examines the key drivers of conduct risk, including the structures, processes, culture and incentives that are embedded in businesses of the financial sector, as well as changing environment pressures. These key drivers remain largely the same as those identified in the prior year, although the FCA note they have updated their view to reflect the changes to the operational environment with the financial sector and economy on the road to recovery.
In Part B, the FCA looks at the evolving risk landscape across financial markets, taking into consideration newly examined cross-market pressures and how changing environment conditions such as economic, social, financial market trends, technological developments and new regulations interact with underlying risk drivers. This section also identifies the seven key forward-looking areas of focus where the regulator considers important in creating risks to its objectives in the future.
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