The Financial Conduct Authority (FCA) has set out its business plan for 2021-22. The plan explains how FCA sees its future role and priorities and how it intends to deliver on the priorities. The plan sets focus on six of the most important cross-market issues: fraud, financial resilience, operational resilience, improving diversity and inclusion, enabling a more sustainable financial future, and international cooperation. In early 2022, FCA plans to publish its wholesale and retail strategies to set out its ambitions for these markets.
The key priorities include:
- ensuring consumer credit markets work well
- developing a digital markets strategy framework to identify and assess potential harms and benefits arising from the increasing digitalization of financial services markets and identifying associated indicators and success measures
- introducing the Investment Firms Prudential Regime for investment firms and support firms as they adapt to it
- supporting the government Roadmap toward mandatory Task Force on Climate-Related Financial Disclosures (TCFD)-aligned disclosures
- consulting on new disclosure rules for asset managers, life insurers, and FCA-regulated pension schemes and consulting on extending the existing TCFD-aligned Listing Rule to more issuers
- standardizing environmental, social, and governance (ESG)-related disclosures by listed firms from the end of the fourth quarter of 2021 and by other FCA-regulated market participants by 2025
- continuing to collaborate domestically, supporting the 2019 Green Finance Strategy of government and plans announced by the Treasury in July 2021 to implement economy-wide Sustainability Disclosure Requirements for businesses and investment products and a new sustainable investment label
- promoting integrity in the market for ESG-labelled securities, supported by the growth of effective service providers—including providers of ESG data, ratings, assurance, and verification service
- using technology to bring about change and overcome challenges in sustainable finance
- assess firms’ progress in implementing the new operational resilience requirements, identify areas for improvement, and assess how able firms are to remain within their impact tolerances to help FCA evaluate the effectiveness of its work to improve operational resilience of the financial sector
- strengthening data-driven monitoring of the financial resilience of solo-regulated firms, targeting the interventions at firms with weak financial resilience and those whose failure is likely to cause material harm
- supervising whether asset managers present the environmental, social and governance (ESG) properties of funds fairly, clearly, and in ways that are not misleading
- completing the transition from LIBOR
- developing how FCA measures firms’ progress against diversity outcomes to ensure a consistent approach across financial services (toward reaching its diversity and inclusion objectives)
- review key aspects of the compensation framework to ensure it remains appropriate and proportionate
- ensure the temporary permissions regime operates smoothly and assess overseas firms in the regime to ensure they can comply with the on-shored rulebook, before all firms leave the regime by the end of 2023
- provide technical advice to the government as it develops mechanisms for cross-border market access in financial services
Keywords: Europe, UK, Banking, Securities, Insurance, ESG, Climate Change Risk, Sustainable Finance, Operational Risk, Diversity and Inclusion, IFPR, LIBOR Transition, Credit Risk, Regtech, Fintech, FCA
The European Commission (EC) announced plans to defer the application of 13 regulatory technical standards under the Sustainable Finance Disclosure Regulation (2019/2088) by six months, from January 01, 2022 to July 01, 2022.
The Bank of England (BoE) published a consultation paper on approach to setting minimum requirement for own funds and eligible liabilities (MREL), an operational guide on executing bail-in, and a statement from the Deputy Governor Dave Ramsden.
The European Banking Authority (EBA) is seeking preliminary input on standardization of the proportionality assessment methodology for credit institutions and investment firms.
Certain regulatory authorities in the US are extending period for completion of the review of certain residential mortgage provisions and for publication of notice disclosing the determination of this review until December 20, 2021.
The Prudential Regulation Authority (PRA) published the policy statement PS18/21, which introduces an amendment in the definition of "higher paid material risk taker" in the Remuneration Part of the PRA Rulebook.
The European Banking Authority (EBA) published its annual report on asset encumbrance in banking sector.
The European Banking Authority (EBA) published a methodological guide to mystery shopping.
The Australian Prudential Regulation Authority (APRA) released a letter to authorized deposit-taking institutions to provide an update on key policy settings for the capital framework reforms, which will come into effect from January 01, 2023.
The Committee on Payments and Market Infrastructures (CPMI) and the International Organization of Securities Commissions (IOSCO) published a report that assesses the business continuity planning activities of financial market infrastructures or FMIs.
The European Securities and Markets Authority (ESMA) has responded to the IFRS consultation on targeted amendments to the IFRS Foundation constitution to accommodate an International Sustainability Standards Board (ISSB) to set IFRS Sustainability Standards.