FCA issued its business plan for the year ahead, with focus on the challenges presented by the COVID-19 pandemic. The annual Business Plan describes the key priorities and the planned activities for the next year. In the Business Plan, FCA has set out the priority areas on which it will work over the next 1 to 3 years as well as other cross-cutting and sector work. The key priorities and planned activities are set out under five overall priorities, six cross-cutting priorities, and the four sector-specific area. The key cross-cutting priorities encompass the areas of brexit, fintech and regtech, climate change risk, and operational resilience.
FCA highlighted that it may be weeks or months before there is a more stable position and can turn fully to the activities in this plan. The key priority areas in the Business Plan are to focus on transforming the FCA operations, deliver fair value in a digital age, make payments safe and accessible, enable effective consumer investment decisions, and ensure that consumer credit markets work well. In relation to the five key priorities, FCA will work across sectors in the following areas that have a broad market impact:
- Brexit—FCA will continue to work closely with European and global stakeholders on developing robust global financial standards and effective supervision and addressing issues of mutual interest, in areas such as conduct, market integrity, and operational resilience. FCA will take steps to ensure that FCA and the UK financial services industry are prepared for the end of the transition period.
- Climate change—The financial sector needs to adapt to manage the physical and transition risks that climate change poses. The regulatory approach of FCA needs to support that. In the coming year, FCA will assess the feedback to its recent consultation on new climate-related disclosure rules for some issuers. The consultation period has been extended and is now open until October 01, 2020. FCA plans to continue the policy research to better understand how retail investment products are designed, the accuracy of disclosure, and whether this enables consumers to make effective decisions on green products.
- Innovation and technology—FCA will invest in new technologies and skills to make better use of data to regulate efficiently and effectively. FCA will deepen its engagement with industry and society on artificial intelligence, specifically machine learning, and focus on how to enable safe, appropriate, and ethical use of new technologies. FCA will replace the data collection system GABRIEL with a new platform for collecting data from firms. It will maintain its international collaboration through the Global Financial Innovation Network, including seeking to facilitate international sandbox experiments and deepening international knowledge-sharing of innovation approaches and new market trends. It will explore if and how to expand its sandbox services to foster and encourage the wider adoption of appropriate technologies, particularly for regtech.
- Operational resilience—FCA aims to set new requirements that strengthen operational resilience. In December 2019, along with PRA and BoE, FCA published joint consultation papers on operational resilience. The consultation period has now been extended until October 01, 2020 due to the impact of COVID-19 on the industry. FCA expects all firms to have contingency plans to deal with major events and expects that the plans have been tested.
Keywords: Europe, UK, Banking, Securities, Business Plan, COVID-19, Brexit, Climate Change Risk, Fintech, Operational Risk, Regtech, ESG, FCA
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
Previous ArticleEIOPA Publishes Opinion on Supervision of Remuneration Principles
HKMA announced that enhancements will be made to the Special 100% Loan Guarantee of the SME Financing Guarantee Scheme (SFGS) and the application period will be extended to December 31, 2021.
EBA launched consultations on the regulatory and implementing technical standards on cooperation and information exchange between competent authorities involved in prudential supervision of investment firms.
BoE has set out a three-phased plan to transform data collection from the UK financial sector over the next decade.
BIS recently made a couple of announcements with respect to the planned and ongoing work in the area of financial technology.
ESRB updated the list of national macro-prudential measures applied by each member state in the European Economic Area.
BoE has set out results of a survey on the impact of COVID-19 events on the use of machine learning and data science.
In response to a request from the European Council and Parliament, ECB published an opinion on the proposed regulation on markets in crypto-assets.
APRA announced the updated aggregate amounts for the 2021 Committed Liquidity Facility (CLF) established between the Reserve Bank of Australia (RBA) and certain locally incorporated authorized deposit-taking institutions that are subject to the Liquidity Coverage Ratio (LCR).
ECB published supervisory Memorandums of Understanding (MoUs) with UK as well as other European and non-European authorities.
EIOPA identified business model sustainability and adequate product design as the two EU-wide strategic supervisory priorities.