FCA Announces Priorities for 2019/20

The FCA has published its business plan for 2019/20, announcing its priorities for the year ahead with  several cross-sector priorities having been set out. These are deemed to be the most significant issues in financial services both at the moment and in the next few years.

Understandably, the most immediate of the issues identified is Brexit and the aim of supporting a smooth transition post-exit from the EU.

The regulator has said it will engage with the financial services industry in order to assess the impact of EU withdrawal and that currently Brexit is ‘the most significant change affecting the financial services market’. Needless to say, Brexit remains an area of great uncertainty and it would be wise for firms to keep an eye on the FCA’s work and advice in this area.

The business plan then identifies the FCA’s continuing priorities which have been areas of focus for a number of years, and are expected to continue as such. They are:

• firms’ culture and governance
• operational resilience
• financial crime and anti-money laundering
• fair treatment of existing customers

Culture and governance within firms is very much linked to the upcoming Senior Managers and Certification Regime (SM&CR). The new regime aims to reduce consumer harm and strengthen market integrity. Under SM&CR, where things go wrong within a firm, individuals can be held to account.

It is worth bearing in mind that while this regulation may be new to general insurance firms, it is not new to the FCA, with it having been implemented in many firms already, including banks and insurers. The regulator will therefore be better prepared to act where the requirements of the regime are not being met.

In his introduction to the business plan, Chief Executive, Andrew Bailey, highlights why accountability and culture continue to be focused on. Emphasis is placed on the individual accountability that will come with the implementation of SM&CR. It is made clear that it is for firms themselves to take the lead in creating and maintaining healthy cultures. A healthy culture is described by the FCA as one which focuses on delivering customer outcomes and where individuals feel free to speak up and be listened to. Weak governance, on the other hand, will increase the likelihood of harm occurring.

As well the Business Plan, the FCA is also publishing its 2019/20 fees Consultation Paper and a paper which sets out the FCA’s Research Agenda.