The Financial Conduct Authority (FCA) published the strategy for 2022-25, along with the business plan for 2022. The business plan details the work FCA will do over the next 12 months to help deliver on the strategic commitments.
The key commitments set out in the strategy are related to dealing with problem firms, reducing harm from firm failure, reducing and preventing financial crime, environmental, social, and governance (ESG) priorities, preparing financial services for the future, and developing regulatory approaches to digital markets. To deliver on the commitments, the business plan sets out the following:
- Build on the regulatory framework by actively monitoring the effective implementation of disclosures by firms and listed companies, working with the government in support of its ambition in green finance, and engaging proactively on the design and governance of transition plans. In 2022, FCA will publish a report covering the recommended disclosures of the Task Force on Climate-related Financial Disclosures (TCFD).
- Work with international regulators and the fintech community to solve global problems through innovation as well as monitor firms and take enforcement action as needed on how they manage the impacts, risks, and opportunities from ESG issues.
- Set rules and standards to ensure greater consistency is applied to firms, firms better understand standards the obligations on them, and harms are properly taken into account. This can be achieved by embedding the new Investment Firms Prudential Regime (IFPR), inputting into developing crypto policies and developing standards for consumer investments firms promoting the need for wind-down plans.
- Develop its approach for effectively supervising the anti-fraud systems and controls of the firms it regulates Continue its work to supervise crypto-assets firms' compliance with the Money Laundering Regulations. FCA will rapidly intervene where firms risk being used as conduits for illegal activity, or where firms pose harm to consumers or market integrity (for example operating without registration, perpetrating fraud or high-risk activities).
- Complete the next phase of Cancellation of Firm Authorization Project. This will allow FCA to automate some of its processes, increasing efficiencies while still providing effective decision-making individuals at the right points.
- Conduct a small number of complex Threshold Conditions test cases to determine whether its aims are supported by current legislation and policy and, where necessary, seek to make changes to support the ambitions. Threshold Conditions are the minimum conditions which a firm is required to satisfy, and continue to satisfy, to be given and retain permissions.
Keywords: Europe, UK, Banking, Securities, Business Plan, IFPR, Climate Change Risk, ESG, Strategic Priorities, AML CFT, Disclosures, Investment Firms, FCA
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous ArticleFINMA Issues Supervisory Guidance on LIBOR Transition
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.
The European Central Bank (ECB) published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks.
Among its recent publications, the European Banking Authority (EBA) published the final standards and guidelines on interest rate risk arising from non-trading book activities (IRRBB)
The European Commission (EC) recently adopted regulations with respect to the calculation of own funds requirements for market risk, the prudential treatment of global systemically important institutions (G-SIIs)