In its first Regulation Round-up of 2017, the Financial Conduct Authority (FCA) has set out its plans for the next 12 months. Chief executive Andrew Bailey promises this will be an ‘interesting year, both for us as regulators and for you as the regulated community’.
Here we look at some of the milestones he flags up, as well as making our own Compliance predictions for 2017.
- The Future Mission consultation
The regulator’s Future Mission proposals closed for comments this week. You can read more here about whether the Future Mission will change the way you’re regulated.
Earlier in January, a summary of initial feedback to the proposals was released. It showed that respondents wanted more clarity on regulatory decisions, and for the FCA to take a more proactive approach to sharing lessons learned and best practice.
Bailey confirmed this week that the FCA will consider all the responses and publish the Mission statement in a few months’ time.
- The Financial Advice Market Review (FAMR)
The FAMR was one of the priorities set out in the FCA’s 2016-17 Business Plan. It examines current practice in the financial advice market, looking at issues including communications. Bailey confirms that the FCA will report on progress on the FAMR this year.
- Extending the Senior Managers and Certification Regime
The current plan is for the SM&CR to be extended to all sectors by 2018 (although the FCA has faced recent calls for it to be dropped for smaller firms). Assuming it goes ahead, some 60,000 firms in total will need to meet the regime’s requirements by March next year.
This will have significant implications, which will be particularly challenging for smaller firms that may not have ready access to resources or technology needed to support the requirements. You can read more about the SM&CR and what it entails here.
- Review of the payday price cap
The regulator will conclude its review of the payday price cap this year. The FCA is also calling for input on high cost credit – any firm wishing to share its views should email email@example.com by 15 February.
Alongside these priorities, we have identified two more things we think should be high on the Compliance radar for 2017.
- The increasing importance of fintech
Financial solutions enabled by technology will continue to grow this year. Whether via established banks or start-ups, the growth in fintech shows no sign of abating. And the FCA is firmly behind innovation in financial services, with its Advice Unit, Project Innovate and its regulatory sandbox for trialling new solutions.
All this points to a 2017 where technology will play an increasingly important role in financial services delivery.
- The growth in ‘hands off’ regulation
The FCA is increasingly looking to firms to police themselves; to create cultures where good governance is the norm, not something that needs to be bolted on at the end of a sale, a financial promotion or a process.
Regulated businesses will need to implement and evidence cultural compliance, rather than ‘tick box’ approaches. This blog looks at how lessons from psychology can help organisations to embed strong ethics into their DNA.
It all adds up to another busy year for Compliance teams. As ever, change is a constant and keeping up with continually-evolving requirements can seem like a full-time job in itself.
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