
FCA Business Plan 2021-22: A new era for regulation
In my article published in T-C News earlier this year, I talked about the early signs coming out of the FCA about a change of approach.
Browse all articles across people aspects of regulation and people development within UK financial services

In my article published in T-C News earlier this year, I talked about the early signs coming out of the FCA about a change of approach.

As we approach the second anniversary of the roll out of SM&CR to all solo regulated firms, we have an opportunity to reflect on progress. As part of our consulting on compliance issues, we at Compliance Cubed are seeing many firms who have processes in place and want reassurance that they’re on the right track.

Despite financial services regulation being in place for many years, why do we still have regular examples of those rules not being followed? And it’s not just the Handbook rules that the PRA or FCA are interested in. Non-financial misconduct, which focuses more on ethical and expected behaviours, is climbing up the agenda, too.

Is the FCA developing teeth and beginning to become an enforcer after all? SM&CR has been part of the regulatory landscape for dual-regulated firms since 2016 and solo-regulated firms since 2019.

Why do we need conduct rules? Should people working in financial services already be acting with integrity? Of course, they should. Obvious, isn’t it? Well, it should be. But unfortunately, it hasn’t always been that way. This is where the FCA’s Regulatory Framework comes in. Consisting of The Senior Managers Regime, the Certification Regime (SMCR)

Delays to SM&CR implementation deadline gives firms time to ‘level-up’ with technology. Many firms will have breathed a sigh of relief when they heard that the FCA’s deadline for the implementation of the Senior Managers and Certification Regime (SM&CR) had been extended – from 9th December 2020 to 31st March 2021.

In April 2020, the FCA and PRA set out the expectations to help dual-regulated firms apply the SM&CR rules following the exceptional circumstances that arose from the coronavirus pandemic (Covid-19). Some additional flexibility was offered in the application of the SM&CR rules to firms that were impacted by coronavirus.

In December 2019, the FCA issued its Consultation Paper (CP19/32) on Operational Resilience. The CP laid out the FCA’s intentions clearly, building on the existing requirements to manage operational risk and business continuity planning with the aim to further strengthen operational resilience.

The UK financial regulators are busier than ever. They are in contact with firms on Covid related matters and have devoted significant resources to their responses to coronavirus. They are also issuing information and updating guidance on an on-going basis. Regulatory visits are still taking place but in a different form.

As the ancient Chinese curse goes, we are living in interesting times. There is so much going on in politics on a daily basis, coupled with the Covid-19 pandemic, we are living within a pretty toxic business cocktail.

With the government’s singular focus on beating Covid-19, thousands of businesses in a state of induced coma, and the understanding attitude taken by regulators, it is quite likely that many compliance infringements went unnoticed over the past four months. But for how much longer?

We live in interesting times as financial advisory firms come to terms with the lockdown and the gradual release from that.