Remember when the FCA consulted on proposed changes to its decision-making procedure? Well, these have happened, effective 26 November 2021.

The changes affect a variety of decisions that can have major consequences for firms and individuals, including decisions on firms' authorisations and individuals' approvals, varying or limiting a firm's permissions, and imposing requirements on a firm. Previously, FCA executives would need to make a recommendation to the FCA's quasi-independent RDC which would decide whether to take the action. Now, FCA executives across the FCA's Divisions can take these decisions directly. For the details, see our infographic.

The FCA made these changes despite various concerns raised during the consultation including about the quality of decision-making and lack of checks and balances.

How do FCA executives want to use these newly unfettered powers? The FCA's press release sounds a clarion call, promising that FCA executives now will be equipped to take "faster and more effective" decisions to "prevent or stop consumer harm". And the FCA's policy statement spells out what the FCA sees as the causes for an increase in consumer harm: that the regulatory landscape is changing "a great deal", with "rapid technological changes, the digitalisation of financial services [and] the emergence of new products and services" leading to a shifting "threat landscape" with fraud and scams perpetuated by new technologies and consumers drawn to high-risk markets and products. Heady stuff.

So the new mood music is definitely now 'moving fast and breaking things', with the proposals weakening key procedural safeguards (as we previously observed). The relevant powers are breathtaking in scope - a fact that's perhaps underappreciated because they have been exercised relatively infrequently to date (though already far more in the last couple of years than previously).

With changes like these, the coming months and years could be eventful and perhaps at times volatile. Firms and individuals need to factor this change in - especially those who work on retail-facing products and services at the cutting edge of financial services innovation. FCA executives should also proceed with caution: an ill-judged exercise of power will open an FCA executive to very public challenge and criticism, particularly if it disrupts an area of substantial financial services activity.

If there's one takeaway for firms and individuals, it's to apply more diligence and care than ever to dealings with FCA Supervisors and marshal internal and external resource early to proactively mitigate risks. You may find yourself on the wrong side of FCA executive action sooner than you think.

The threat landscape has shifted for consumers, with fraudsters and scammers benefitting from new technologies and new consumers being drawn to high-risk markets and products. We need to adapt to ensure we tackle this increased harm to consumers.