FCA publishes its 2023/24 Business Plan

Written by Victoria McCarron

The FCA has published its annual Business Plan, which sets out its business priorities for the coming year.  It is focused around the three focus areas set out in its 2022 Strategy:

• Focus 1: reducing and preventing serious harm
• Focus 2: setting and testing higher standards
• Focus 3: promoting competition and positive change

Context

This is set in the context of the economic and geopolitical environment, which the FCA expects to remain highly uncertain. It emphasises that these uncertainties lead to a heightened risk of firm failure, of which the resolution of Silicon Valley Bank UK and interventions in relation to Credit Suisse have underlined.  Key uncertainties include:

• Interest rates and inflation
• The risk that unemployment increases more than currently projected
• Potential for further declines in real household disposable incomes
• Potential for further market volatility

Naturally, the FCA also focuses on the cost of living crisis, and its role to make sure firms treat customers fairly, support those in difficulty and give them the information they need to make good decisions.  It sees the Consumer Duty as playing a key role in underpinning this work, as well as many of the other activities the FCA already has in train.  However the FCA recognises that there is also potential for longer term consequences from the current cost of living pressures, for example in relation to pensions saving. It plans to work to understand further these consequences this year.

The FCA's focus for 2023/2024

In light of the above context, the FCA's plans for the coming year against its three focus areas are as follows:

Focus 1: reducing and preventing serious harm

The FCA has six commitments under this focus which are as follows.

• Dealing with problem firms
• Improving the redress framework
• Reducing harm from firm failure
• Improving oversight of Appointed Representatives (ARs)
• Reducing and preventing financial crime
• Delivering assertive action on market abuse

Focus 2: setting and testing higher standards

 The FCA set out four commitments under this focus:

• Putting consumer needs first
• Enabling consumers to help themselves
• A strategy for positive change: our environmental, social and governance (ESG) priorities
• Minimising the impact of operational disruptions

Focus 3: Promoting competition and positive change

The FCA makes three commitments to promote competition and positive change:

• Preparing financial services for the future
• Strengthening the UK’s position in global wholesale markets
• Shaping digital markets to achieve good outcomes

Where the FCA has additional resources available, it will focus on the following four commitments:

• Preparing financial services for the future – working with the Treasury to implement the new regulatory framework so the FCA can address emerging harms more efficiently;
• Putting consumers’ needs first – to improve consumer protection and standards for all consumers and ensure support for struggling consumers remains a priority to the FCA;
• Reducing and preventing financial crime – prioritising this in order to protect consumers to an extent and consumers in vulnerable circumstances specifically, as they may be more susceptible to fraud;
• Strengthening the UK's position in global wholesale markets – to help ensure that the UK continues to be seen as one of the leading global markets of choice and strengthen its ability to respond to market volatility.

Finally, the FCA reminds firms that the Business Plan does not cover all of the FCA’s activities, as well as stating that its Regulatory Initiatives Grid is updated twice a year and gives details of the FCA's planned regulatory programme.