On the 10th September, The FCA published its Annual Report and Accounts which looks back on their key pieces of work throughout 2019/20. In this month’s insight we have summarised the key themes from the report.
Highlights from the FCA’s work this year include:
- Measures to give immediate support for over 3.4 million consumers and for thousands of businesses affected by Covid-19
- Continued work to prepare for EU withdrawal
- Driving change in the culture of financial firms with the extension of the Senior Managers and Certification regime (SM&CR)
- Continued focus to help to educate and inform consumers on scam prevention
- Improving protection for users of high-cost credit, including a price cap on rent-to-own products, saving some of the UK’s most vulnerable consumers an estimated £19.6m a year
- Imposing 15 financial penalties on firms totalling over £224m for misconduct
- Ensuring £135m was paid to customers for disclosure failings on enhanced annuities
In addition to the above, the FCA has done a lot of work in response to coronavirus to ensure as many people and businesses reach the other side of coronavirus’s immediate impact in as good a shape as possible. Christopher Woolard, Interim Chief Executive of the FCA, highlight that the regulator’s efforts to ensure a rapid response to the challenges in the midst of the crisis was made possible by long-term work, much of which came to fruition last year.
The FCA also outlined the work they have done as part of their cross-sector priorities. We have mentioned some of these below.
- Firms’ culture and governance – The work included extending the Senior Managers and Certification Regime (SM&CR) to nearly all FSMA-authorised firms; hosting 2 CultureSprints with participants designing innovative solutions to transform culture. launching a Transforming Culture LinkedIn page to share resources on driving healthy cultures.
- Firms’ operational resilience – In order to maintain continuity of service, the FCA worked closely with domestic and international agencies. They identified third-parties as the significant root cause of 16% of reported incidents in 2019/20 and change management was described as the greatest cause of technological incidents reported to the regulatory authority.
- Financial crime- Anti-Money Laundering (AML) fraud – The FCA launched a campaign targeted at investment scams, generating over 324,000 views on Facebook and Instagram and driving over 16,000 people to the FCA’s ScamSmart: online trading webpage.
- Fair treatment of existing customers – The FCA looked at a number of markets to examine pricing practices more closely. An example of this is the investigation of pricing practices in General Insurance, Cash Savings and Mortgages which showed that consumers don’t always achieve fair value and some pay a loyalty penalty.
- Innovation, data and data ethics – As chair of the Global Financial Innovation Network (GFIN), the FCA work with financial services regulators and global bodies to share intelligence and best practice on the implications of innovation. GFIN’s One Year On report sets out its progress.
- Demographic change – one of the works done in this area is to ensure consistent outcomes for vulnerable consumers. In the FCA’s guidance consultation it set out how the Principles for Businesses require firms to treat vulnerable consumers fairly.
- Future of Regulation – By reviewing the approach to ensure existing and new regulatory challenges can be met regulatory challenges, the FCA last published its first annual Perimeter Report. It explains the FCA’s role, how they manage issues on the edge of the perimeter and responds to specific challenges.
- Climate change and green finance – In order to support the necessary transition to a greener economy, a new disclosure rule to improve premium-listed issuers’ climate-related disclosures. A Feedback Statement was set out to help tackle barriers to effective investor stewardship.