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The Financial Conduct Authority (FCA) today set out details of how it intends to meet the regulatory challenges ahead following a detailed review of its strategy, priorities and ways of working.
The FCA’s remit is far ranging and challenging with the recent additional responsibility for regulating consumer credit meaning the number of firms that now come under the FCA has trebled over the past eighteen months.
The approach is shaped by a strategy that will provide a “sharper focus” on how firms are regulated and on delivering the right outcome for consumers and the markets.
Britain’s non-bank financial markets regulatory authority has taken a relatively passive role since its inception, for the vast majority of alleged transgressions by companies which it oversees rather than actually taking them to court and applying strict sanctions as per its transatlantic counterparts.
The new approach recognizes the differences in approach required across the industry given its size and variety, based on emphasizing sector and market-wide work and reflecting the FCA’s competition duties. It also aligns the data and intelligence gathered from all sources to present a consistent FCA-view of what is happening in the market and what behaviour is expected from firms.
Several structural changes to how the organisation works will complement this new approach, which reflect the lessons learned from recent external reviews.
Martin Wheatley, chief executive of the Financial Conduct Authority, said of the changes “In the 18 months since the inception of the FCA we have achieved a lot, and now is the time to sharpen our focus. To look at how we can deliver our objectives and ambitions to the best of our abilities. The financial industry continually evolves and to regulate it effectively we must evolve too.”
The main structural changes include:
· Bringing together the current Authorisations and Supervision Divisions, with the FCA’s specialist supervision functions such as financial crime and client assets. Two Divisions will be created from April 2015 allowing for a clearer distinction between the FCA’s approach to regulation of large and smaller firms.
· Tracey McDermott will take responsibility for managing this transition and will subsequently lead one of the new Divisions.
· A new Strategy and Competition Division led by Christopher Woolard will build on the FCA’s competition capabilities bringing together more of the FCA’s market based work supported by an enhanced data, intelligence and research capability to enable better prioritization and focus across the organisation.
· A new Risk Division to provide a strategic approach to the management of internal and external risk. Richard Sutcliffe will be the acting Director for the new division;
· A new Markets Policy and International division led by David Lawton will focus on increasing the FCA’s focus and influence on the European stage;
· A market oversight division will be created incorporating the regulator’s UKLA and Market Monitoring functions. This will be led on an acting basis by Marc Teasdale. Other specialist market supervision functions will be integrated with Supervision.
The changes will commence from 5th January and will be fully in place by April.
Member of the Executive Committee and the Board, Clive Adamson, and Executive Committee members Zitah McMillan and Victoria Raffe have announced they will be leaving the organisation as part of the structural changes.