Rathi repeats a strong message from Business Plan 2021/22 that the FCA wants to transform again. The FCA continues to recognize the impact of the pandemic, Brexit, technology and the search for a greener economy. These factors contribute to: a growing population of adults with characteristics of vulnerability; changes in methods of accessing and using financial services; and the emergence of new products and services. Therefore, the FCA examines how and what it regulates.

In his speech, Rathi explains that the FCA wants to be a regulator that “tests [its] its powers to their limits ”to ensure market integrity, and that over time, it plans to“ become as much a data regulator as a financial regulator. ”take more risks and act quickly.

FCA priorities for 2021/22

The FCA continues to focus on some of the results spelled out in its previous business plan, as well as the new consumer obligation, while also focusing on what it sees as the six most important cross-market issues: fraud. , financial resilience, resilience, diversity and inclusion, environmental, social and governance work, and international cooperation.

Testing the powers of the FCA to the limit

In the 2021/22 business plan, the FCA underlines its role in preventing serious misconduct leading to damage. It is clear from recent communications from the FCA that it intends to act faster and with more confidence; accelerate its coercive response; and intervene more often in real time.

Aware of past criticisms that she acts slowly or is too risk averse, Rathi confirms that the FCA wants to have a bolder risk appetite when dealing with serious misconduct. This includes the use of criminal powers in serious cases of financial crime or money laundering, as evidenced by the recent prosecution of a bank in the context of the FCA’s first criminal prosecution under the 2007 Regulations. money laundering.

Rathi also says the FCA will advocate more if it needs it, but without specifying how and when the FCA would decide if it needs it. He suggests that he might need to advocate where he can contribute to legal certainty, offering considerable benefits to the industry. Perhaps we can expect to see repeated use of the financial markets test case pattern.

FCA’s desire to be data-driven and ultimately to be a data regulator

In its 2021/22 business plan, FCA underlines its continued interest in becoming more data-driven. He wants to make sure he collects the right data efficiently, noting the high cost for companies to provide that data. In addition to automating the collection of additional data, analyzing data across all systems, and strengthening its holistic assessments of companies, FCA intends to collect publicly available information on companies and products (such as as social media monitoring and website scraping) to identify and prioritize business or harm. for surveys. Data-driven monitoring will be a particular focus, for example, in FCA’s work on financial resilience.

In his recent speech, Rathi states that through a myriad of programs and initiatives, the CFA sees itself “accelerating[ing] [its] aim to become a premier data and digital regulator. ”Going forward, FCA believes that compliance checks could be“ completed in near real time ”.

The FCA realizes that it is increasingly regulating “data-heavy” companies. He is therefore aware of the risk that “as the demand for data increases, companies may be able to use, market or restrict the data in ways that create bad results for users.” We can see increasing attention to this concept in FCA enforcement action. The FCA is also working through the Digital Regulators Cooperation Forum (a partnership with certain other organizations) to cooperate and develop common capacities, including on artificial intelligence and data ethics, and is to report on the results of its call for papers on “Access and use of wholesale data”.

New reforms on the horizon

Unsurprisingly, Rathi also notes that the FCA wants to “anchor and shape” international regulatory standards.

Back on the national horizon, the FCA has already highlighted various reforms or other changes that companies will need to understand and implement quickly in order to avoid regulatory scrutiny:

  • reforms of listing rules;
  • the new world without LIBOR (for which the FCA has worked with partners from the EU and the US to “align the results of different legislative approaches”);
  • increase environmental, social and governance work; and
  • “far-reaching” wholesale market regulatory reforms.

While the FCA is looking to transform, it can also transform the regulatory landscape, including many rules and requirements that businesses must follow. In addition, we are likely to see a push by the FCA to initiate more enforcement action (including criminal prosecution) swiftly and boldly.

Companies should: (i) keep abreast of applicable regulatory requirements and; (ii) review their own culture, procedures, systems and controls to have time to identify and quickly rectify any problem. We have seen some slowdown in the FCA’s investigative work during the pandemic, but the FCA is clearly keen to adapt to the current forces at play.


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