In the Business Plan, the FCA discuss taking a proactive approach to tackle present and future challenges, raising the bar to 'support market integrity and sustainable innovation', whilst reiterating the need for firms start with high standards and maintain them.
The four priorities for consumers set out in last year's Business Plan remain the same for this year and they are:
- to enable effective consumer investment decisions;
- ensure consumer credit markets work well;
- making payments safe and accessible, and
- delivering fair value in a digital age.
That being said, the FCA recognises the scope and shape of these priorities may change to reflect changes in consumers' finances and behaviour, one factor being a result of the pandemic.
The FCA also highlight the importance for firms to place customers' interests at the centre of their business, to ensure that:
- communications equip consumers to make effective, timely and properly informed decisions about financial products and services;
- products and services are specifically designed to meet consumers’ needs and sold to those whose needs they meet;
- customer service meets the needs of consumers, enabling them to get the benefits of products and services and act in their interests without unnecessary barriers, and
- the price of products and services represents fair value for consumers.
Key areas of priorities in the Business Plan to note include:
- Ensuring firms start with high standards and maintain them – this means that the FCA will be taking a more robust approach in assessing firms applying to enter the regulated market and have stronger oversight of existing firms, in particular those growing significantly. Firms will have to demonstrate their ability to maintain market integrity whilst protecting consumers.
-
Consumer markets:
- Enabling consumers to make informed financial decisions – the FCA aim to set and enforce standards for firms regarding information provided to consumers, including financial promotions and investment opportunities surrounding cryptoassets, as well as improve communications issued by the FCA to protect consumers such as ScamSmart;
- Reviewing approaches to debt advice rules to address greater demand for debt advice due to recent times and address consumers struggling with debt – the FCA consider the potential residual effects of the pandemic to the public and plan to ensure rules around debt advice are suitable.
-
Wholesale markets:
- Ensuring primary and secondary markets work well following the UK's exit from the EU – the FCA are working with the Treasury to simplify complex rules and ensure transparency in pre and post trades in securities and derivatives market;
- Ensuring an orderly transition away from LIBOR for firms and markets;
- Ensure pension providers offer good value products – the FCA will work jointly with the Pensions Regulator to ensure comparability across products.
-
Cross market priorities:
- Fraud strategy – the FCA commit to detecting and pursuing unauthorised and unapproved fraudsters whilst informing the public on how to protect themselves from fraud;
- Improving financial and operation resilience at firms to minimise loss and harm to consumers, ensure firms remain viable and protect the stability of the financial market;
- Environmental, social and governance (ESG) - supporting environmental goals by adapting the regulatory framework to enable a market-based transition to net-zero carbon emissions;
- Improving diversity and inclusion both at the FCA and in regulated firms.
We will be issuing further commentary on the FCA's priorities set out in this year's Business Plan with a seminar discussing our comments on Wednesday 8th September 2021.
Authors: Sharon Ugboaja and Andrew Jacobs
