The FCA has published its Mission and Business Plan for 2017/18 which sets out its work programme and priorities for the coming year.
The FCA’s six cross-sector priorities for the coming year are:
- Combatting financial crime and anti-money laundering;
- Firms’ culture and governance;
- Promoting competition and innovation;
- Technological change and resilience;
- Treatment of existing customers; and
- Consumer vulnerability and access to financial services.
The focus on combatting financial crime and money laundering, and promoting appropriate cultures in regulated firms are repeated from the previous year’s Business Plan. The key messages in relation to these areas are:
- The FCA will continue to embed the Senior Managers & Certification Regime and will focus on how the Regime is integrated into the running of deposit takers and PRA-designated firms. It will also review outsourcing of management and oversight.
- The FCA will consult on the design and implementation of an accountability regime for all FSMA firms in 2017 and complete its preparation to implement the regime in 2018.
- The FCA will exercise its enforcement powers (usually its civil enforcement powers but it may resort to its criminal enforcement powers where appropriate) in relation to poor AML controls to limit the level of risk and send a message of deterrence to industry.
- The FCA will work with Treasury on anti-money laundering policy issues as Treasury transposes the 4th Money Laundering Directive into UK law, and on negotiating EU proposals to revise the 4th Money Laundering Directive to strengthen the fight against terrorism.
- The FCA will continue to review the regulatory framework governing remuneration policies and practices with a view to promoting effective risk management.
- The FCA will analyse early responses to the 2016 Financial Crime Annual Data Return to identify poor practices and determine where its supervision resources should best be directed.
- Treasury has proposed that the FCA be responsible for reviewing the quality of anti-money laundering supervision by professional regulatory bodies such as the Solicitors Regulation Authority and the Institute of Chartered Accountants in England and Wales. A new office called the Office for Professional Body AML Supervision (“OPBAS”) will be established within the FCA to act as a ‘supervisor of supervisors’. The work of OPBAS will be funded by a new fee on the professional body supervisors.
The Business Plan also highlights the risks associated with technological change and innovation, and in particular it emphasises cyber-crime as a cause for concern. The Plan indicates that the FCA intends to carry out a significant amount of work on this issue over the coming year.
A number of the other cross-sector priorities identified in the Plan are similar to those set out in last year’s Plan, and overall this year’s Plan appears to focus on developing and consolidating previous initiatives rather than charting an entirely new direction. The Plan unsurprisingly acknowledges the uncertainty arising from Brexit and emphasises the need for flexibility to ensure that the regulatory framework continues to operate effectively following the UK’s withdrawal from the EU.