The Financial Conduct Authority (FCA) says it will remove unnecessary regulations and relax some of the rules firms must adhere to in response to the UK government’s calls to remove barriers to economic growth.
The FCA made the pledge today (17 January) in a letter to the prime minister, which sets out regulatory reforms to boost the economy.
In the letter, the FCA’s chief executive Nikhil Rathi said the regulator will work with the government “in a fundamentally different way to support the growth mission”.
The reforms proposed by the FCA include simplifying or removing some rules from its handbook, working closely with the Bank of England and the Prudential Regulatory Authority to reduce reporting burdens for firms and making the Senior Managers and Certification Regime more flexible.
Other reforms include reviewing the reporting requirements and removing ‘redundant returns’, which could affect 16,000 regulated firms, simplifying lending advice rules for mortgages and opening a discussion “on the balance between access to lending and levels of defaults”, as well as removing the need for a Consumer Duty board champion.
Rathi stressed that “growth will be a cornerstone” of FCA’s strategy through to 2030. He said the growth strategy will include unlocking capital investment and liquidity, accelerating digital innovation to enhance productivity and making it easier for firms to start up and grow.
He also outlined some of the actions already taken by the FCA to support the economy and boost growth.
They include reforming listings rules, bolstering investment research, revolutionising provision of financial advice, launching long-term asset funds, reforming the value for money framework for pensions targeting better long-term returns, and reforms to fixed income and commodity markets to sustain UK market leadership.
The FCA’s letter is in response to the prime minister’s calls last December for regulators to submit proposals by mid-January on reforms to boost economic growth.
The PM’s letter, which was signed by chancellor Rachel Reeves and business secretary Jonathan Reynolds, said improving regulation to enable growth and not hold back investment was “an essential part of the government’s growth mission”.
It said collaboration was essential to ensure the regulatory environment became “more pro-growth and pro-investment”.
Errm…
I seem to remember Tony Blair saying at a dinner in London… ‘We must remove the shackles that act as sea anchors on the engine of (financial services) prosperity’ Two years later it was 2008….
Also, if this possible now… what tf has the FCA (and others) been doing last ten years (then)? The new advice, which will mean easier distribution ‘shackles’, is something to be wary of…
It will be interesting note which providers take the short term money windfall before the tears arrive…
Banks excluded of course… BtW… how many Advice firms were consulted about all these changes?
stick the rule book in the bin and start again
A “Consumer Duty Board Champion” sums up everything that is wrong with this over bearing micro managing regulator symbolised by Consumer Duty. Which when you break it down is a completely unnecessary block of regulation.
I can’t get my breath! This is the biggest load of lip service the FCA has come out with!
Because of this inept, out of touch, overly burden some regulator we are turning clients away left, right & centre all because of the volume of work involved in processing it and the inherent risks associated with it.
We have put a block on all new business also so we can fulfil the consumer duty assessments, the retrospective business reviews, the compulsory annual service reviews for existing clients and all with CMC’s waiting in the wings to chase refunds for any none compliance!!!
As for the vulnerable customer rules, what an absolute croc! In my opinion the best way to deal with the regulators classification of vulnerable customers is turn them away and recommend them to the citizens advice. Done so to safeguard the firm & reduce the volume of work a tad. ( I informed the FCA this was our way of meeting their new vulnerable customer criteria and was told to engage with vulnerable customers not avoid contact with them).
(at what point is one responsible for their own actions).
As a firm thats been trading 37 years, always offered an open door policy to our clients and always prided itself on the service standards and support to our clients, across 2 – 3 generations we now find ourselves cutting these same clients adrift because of the amount of work & documentary evidence required to meet the regulators massive regulatory burden in looking after them. (Suitability report for this, suitability report for that even with no sale!!!)
What person in their right mind wants to expose themselves to the continual changing criteria, the massive volume of documented work just undertaking a review with the added benefit of a life times liabilities on the advice and the possibility of refunding the clients their fees on the next FCA instigated whim!
In my opinion the regulator is so far out of touch and doe’s not understand (or want to understand) how a small practice has a close & trusted, open door relationship with its clients.
Because of their ignorance/intention to kill the advice industry I believe the level of regulation and the inherent risks associated with it are creating an environment where its not worth dealing with vulnerable clients, taking on board any new clients, transacting any new business or exposing ourselves to the regulator in any other advice reviews all enforced under the Consumer duty!
The only way forward I see is out of the industry, so if that’s a recipe for growth & pro generation with reduced regulation they’ve hit the nail on the head!
To try and turn around the leviathan they have built within the arena of advice provision will take many years, if indeed it is even possible.
The public now have an expectation and meeting that requires good and consistent market conditions (good luck with that) and a very comprehensive audit trail, not that this will really rebut a complaint.
The advice process has become too evolved and providers have shown that they cannot afford to deliver advice d2p, so I’ll get my popcorn and watch with much interest but little expectation as to a changed landscape; unless the ‘pile em high, sell em cheap’ option is allowed back of course (I give you auto enrolment schemes as a point in case).
As long ago as 2007, the then government’s expectation was that as regulators integrated into their regulatory culture and processes the standards set out in the Statutory Code of Practice [for Regulators], they would become more efficient and effective in their work.
The foreword said that they were expected to use their resources in a way that would get the most value out of the effort that they’d be making, whilst delivering significant benefits to low risk and compliant businesses through better-focussed inspection activity, increased use of advice for businesses, and lower compliance costs.
The FSA and its successor the FCA have, ever since, studiously and totally ignored the Code (despite the fact that, being statutory, it’s supposed to be THE LAW). What will be done if it ignores these latest directives in the same tacitly defiant and arrogant manner?
Elsewhere, it’s reported that the “FCA [intends] to lean more on Consumer Duty to swerve (?) introducing additional regulation”. If so, who knows what lies ahead?
Further to my missive of last Friday… it seems the subsequent comments hold little faith/belief/…. in FCA or its actions…
It is worth remembering, however, that some there are beautiful people there who have sensitive feelings….
Hence, nothing to see here – possible upset – mark own homework – economy drive – vague interpretations – flexibility – break laws and own rules – human touch – – no consultation – saving time….and carry on…
Quite what the coal face and, remembering clients (public) too, will make of it all will be nothing to do with FCA… so there! I wonder if PI Insurers were consulted… ha, ha, ha, ha,… no, really… I must be making it all up,,, or just a dream I’m having…
So, all of a sudden, the bureaucrats at Endeavor Square want to tear down regulatory barriers at the behest of the current government. I rather wonder why it is only now that government and regulator think this is worth doing? If it is worth doing now, why wasn’t worth doing 10 or 20 years ago?
When Labour was last in office (14 years ago), the damned awfulness of the FSA was known but it wasn’t as awful as it’s since become and, for reasons at which we can only guess, the Conservative government just looked the other way.
Rachel Reeves has cast a fresh pair of eyes at the situation and has decided that action is very much required. We can only hope that if the FCA doesn’t comply (as most people expect), she’ll kick a few backsides, as far up the power chain as necessary.