The FCA’s Business Plan for 2023/24, covered in overview in our earlier post, reiterates the FCA’s focus on reducing misconduct that can cause serious harm, and includes six commitments and related actions the FCA plans to take over the coming year.
One important area relevant for all firms is financial resilience. The FCA wants firms to meet their financial resource requirements so that they can conduct business, wind down and, where applicable, fail without causing significant harm to consumers and market participants.
The Business Plan confirms the FCA’s plans to introduce a new regulatory return requiring 20,000 solo regulated financial services firms to provide a baseline level of information about their financial resilience.
The Business Plan also highlights other activities the FCA will continue during 2023/24, including:
- publishing findings and examples of best practice relating to the implementation of the Investment Firm Prudential Regime (IFPR);
- inputting into developing standards for financial resilience requirements in the cryptoassets sector; and
- monitoring higher risk business models during the first year after authorization and during periods of high growth (see also our post on the FCA’s recent findings from its Fast-Growing Firms review).
Proactivity and assertiveness on the part of the regulator are also key themes. The FCA intends to pursue various methods to identify harm and act to reduce it quickly, including the use of data dashboards and other tools to identify emerging issues, and where relevant use its powers more assertively to initiate relevant insolvency processes to reduce harm from firms.
While firms will always carry a risk of failing… we expect them to be financially resilient and recover quickly from disruptions.