The Top 10 Things the FCA Is Focusing On

Here are top 10 thing the FCA is focusing on recently. High-risk investments ranks the TOP 1. Let's see details:

1. High-risk investments

This is an area of priority for the FCA, which has vowed to strengthen financial promotions for those investments which it categorises as ‘high-risk’.

In its business plan for 2021/22, the regulator said it will consult on changes to its financial promotions rules for high-risk investments, taking into account the feedback it receives after seeking views on its proposals around the subject.

In its response, the UK Crowdfunding Association (UKCFA) argued that P2P investors already have a good understanding of risk so additional City regulator rules in this space could only serve to push out platforms and companies supplying their loans into the unregulated space or overseas.

2. Being proactive

When speaking about the FCAs business plan, chief executive Nikhil Rathi said the regulator will be more proactive, tough, confident, decisive and agile.

He said the FCA intends to be more innovative with technology, more assertive with its powers, more adaptive with its approach and that it will act fast and where it cant act, it will engage enthusiastically with those who can.

At the end of July, the FCA said it is consulting on moving some decision-making from its regulatory decisions committee to its authorisations, supervision and enforcement divisions to quicken its decision-making processes and produce more effective decisions.

3. Authorisations

Earlier this month, the FCA said that it expects to intervene more often to prevent harm to consumers and market integrity, including, if needed, rejecting more applications for authorisation.

It will soon consult on proposals to streamline decisions about authorisation and specific supervisory and enforcement actions.

As part of outlining its progress on implementing recommendations from the Gloster Report, in the year to March 2021, one in six firms which applied to the City regulator for authorisation were refused, rejected or withdrew their application after engagement with the FCAs authorisations division.

4. Supervision and checking firms permissions

Within the same progress update, the City regulator said it has trained 2,600 frontline supervision, authorisations and enforcement staff in various areas.

The FCA has used its ‘use it or lose it’ programme to identify and take action to remove permissions for regulated activities that are not being actively used where it believes that out-of-date permissions may cause harm to consumers.

In July, the FCA started writing to all authorised credit broking firms, including P2P lending platforms that hold these permissions, to check that they are using them.

In its business plan, the FCA said it will create a ‘consumer investment coordination group’ with the Financial Services Compensation Scheme (FSCS), the Financial Ombudsman Service, and the Money and Pension Service to gather information on sharp practices so it can better target interventions.

5. Compensation

In the business plan, the FCA said it is reviewing its compensation policy framework and will review aspects of its rules and the scope of FSCS compensation payouts.

6. Recording complaints and taking action

As part of updating its progress on implementing Gloster Report recommendations, the FCA said that between the period of October 2020 and June 2021 it transferred 382 calls to the FSCS after establishing a process to enable staff to directly transfer calls to the FSCS.

7. Protecting consumers with its warning list

Within the same update, the FCA changed the criteria for its warning list to alert consumers to potential fraud, and it saw an increase in consumer alerts from 573 in 2019 to 1,184 in 2020 and 808 up to July this year.

8. Taking action against debt packager firms

Following a review of debt packager firms, five have stopped providing regulated debt advice until further notice and the FCA has used formal powers to stop another firm from providing regulated advice.

9. Understanding crypto

The FCA has extended a temporary regime to allow cryptoasset firms to continue trading while it considers their registration applications.

The regulator has also banned cryptocurrency exchange Binance from operating in the UK.

10. Diversity consultation

The FCA is consulting on proposals to improve transparency for investors on the diversity of listed company boards and their executive management teams.

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