NOTING FCA’S BUSINESS PLAN 2022/2023
The FCA’s 2022/23 business strategy and plan have been made public. The new three-year strategy and annual plan are intended to assist businesses in comprehending the regulator’s areas of focus, concerns about risks and harm, and upcoming work plan.
The FCA has fundamentally revised both its approach and the associated business plan, despite the fact that it has only been nine months since the FCA published its three-year strategy in July 2021. The strategy and plan feel very different from what has been done in the past because it has taken a more holistic and outcomes-focused approach.
However, a close examination of these FCA regulations reveals that rather than a radical shift or shift in focus, they are more like a repackaging of existing commitments. The FCA’s decision to use more granular metrics and a higher level of accountability to gauge progress is the most significant step change. The FCA will now be able to evaluate how well it is performing in relation to its areas of strategic focus because the strategy will be fixed for the next three years.
In this new business plan, FCA has set out that;
- Reduce and prevent serious harm, set and test higher standards, and encourage competition and positive change are the three areas of focus.
- Fair value, confidence, access, and suitability and treatment are the four consistent topline or overarching outcomes. The initial three apply to both discount and retail, while the last just applies to retail.
- 13 commitments that will direct particular regulatory activity over the next three years. The Business Plan details the specific actions that the FCA intends to take this year to fulfill these commitments.
Moreover, the FCA gives a report on its change to an information driven controller, its public areas technique, and its continuous obligation to work on its variety and incorporation.
AN OVERVIEW OF FCA’S BUSINESS PLAN
- A strategy zeroed in on wanted results
The FCA’s related strategy has a more grounded arrangement to the FCA’s technique than we have seen beforehand and it streams straightforwardly from it. The FCA business plan basically looks into each of the commitments, outlining
- The goals it wants to achieve
- How it plans to measure progress
- How it plans to get there
- A Clear Cut and Interlocked Strategy
The FCA has re-articulated its strategy through the outcomes it expects all businesses to deliver in order to demonstrate its shift from being focused on processes to being focused on results. The new three-year plan aims to put more emphasis on:
The FCA has identified what it refers to as “consistent topline outcomes” beneath these focus areas. These outcomes include: reducing and preventing serious harm; setting and testing higher standards; encouraging competition and positive change.
- Formal metrics to increase FCA accountability
The FCA has established specific metrics to track progress toward the “topline outcomes” it aims to achieve. Baseline values are provided in areas where metrics already exist. The FCA has detailed its future plans in cases where metrics are not yet available. Through 2022 and 2023, the metrics will be further developed and updated.
- FCA evaluates its own positive impact
The FCA has published the following as a continuation of the accountability theme: for the first time, a paper designed to explain how it adds value to society or the public. Quantified estimates of the positive impact of a subset of its activities, specifically its policy interventions and enforcement work, are provided in this paper, which is intended to be published on a regular basis (presumably annually).
The FCA’s annual budget reflects the cost of the resources it will need to complete the work it has proposed for 2022/23. The Annual Funding Requirement, which is the total amount that the FCA charges the financial services industry to fund its operations, is the key figure for businesses. In comparison to 2021/22, the proposed funding requirement for 2022/23 is £640.1 million, a 4.3% increase.
The FCA has also published its annual consultation on regulatory fees and levies, which provides additional information about its funding requirement and the impact on specific firms’ activities, in addition to the strategy and business plan.