FCA Business Plan 2024

March 2024

The FCA has published its business plan for 2024/25. As it is the final year of its three-year strategy there are, unsurprisingly, no new areas of focus and in fact the business plan is noticeably shorter in detail than usual. Overall, the plan shows increasing supervisory oversight of Consumer Duty, financial crime and market abuse. Alongside this, the FCA will be making proactive efforts to improve the competitiveness of the UK wholesale markets and support innovation and digitalisation across all sectors.

Against its three original objectives, as well as its new secondary objective, the FCA will undertake the following activities in the next year:

1) Protect consumers: 

• Test if firms are meeting the high standards set by the Consumer Duty (including making sure pension products deliver value for money and consumers better engage with their pensions.)
• Support people's long term financial wellbeing through progression of its Advice Guidance Boundary Review. 
• Develop its use of AI to help prevent fraud and scams.

2) Ensure market integrity: 

• Finalise capital markets reforms. 
• Lead the debate on how the right form of regulation can support growth for UK markets. 
•  Continue to invest in data and technology to support rigorous market oversight whilst monitoring risks in markets and engaging where appropriate. 

3) Promote effective competition: 

• Promote competition and innovation to deliver good outcomes for consumers. 
• Identify instances where effective competition can better deliver fair value outcomes under the Consumer Duty. 
• Continue to look to market reforms that bring the benefits of innovation and digitalisation.

4) Secondary international competitiveness and growth objective:  

•  Focus on embedding the secondary objective to facilitate international competitiveness of the UK economy — by enabling the seven key drivers of productivity. 

The FCA said it will continue to deliver on the 13 public commitments it set out in its three-year strategy. The FCA will focus (and the plan gives more specific detail) on the first 3 commitments.

Commitment 1: Reducing and preventing financial crime — the FCA is committing to increase investment in its systems to use intelligence and data more effectively to take assertive action to tackle financial crime — such as scams and fraudulent websites. It will also strengthen its supervision of firms' sanctions systems and controls and undertake proactive assessments of anti-money laundering systems and controls for those firms deemed higher risk.

Commitment 2: Putting consumers' needs first — the FCA is undertaking a review on how well embedded consideration of vulnerable customers is and the outcomes that are being generated. Alongside, and aligned to this, the FCA will continue to focus its interventions where there is greatest risk of harm or where more work is needed by firms to identify and address gaps and to evidentially meet the higher standards of the Consumer Duty. New work announced include reviews of unit-linked pensions and long-term savings products to test the transparency of charges across value chains, how firms assess overall product value and their response where they identify unfair value. 

Commitment 3: Strengthening the UK's position in global wholesale markets — the FCA will continue to update the regulatory framework in areas such as Listing Rules, investment research and ongoing UK MiFID reviews. It will look to encourage and support innovation and evolving markets i.e. tokenisation, digital securities sandbox, and the launch of the Private intermittent Share and Capital Exchange Service (PISCES) by the end of 2024. It will also look to continuously improve the authorisation process as well as its market monitoring capabilities.

The FCA does announce some detailed supervisory reviews within the plan, so it is well worth firms reviewing the relevant sections to check their alignment on these specific areas of focus to FCA's expectations — as well as validate the firm's focus to the broader objectives and public commitments.

KPMG's Regulatory Insight Centre will be monitoring this year for forward signals from the FCA on significant changes to its next three-year strategy and where, and how it pivots from here. Sign up to our distribution list here to be kept informed.