THE TIMES THEY ARE A-CHANGIN
By Geoff Spencer, CEO
3 December 2024
I doubt the Nobel prize winner, and all-time great singer- songwriter, ever thought he would provide the introduction to an article about UK financial service regulators – apologies Bob!
Following the recent Mansion House speech by the Chancellor, and following on from her predecessor’s efforts to bring a change of stance in financial services regulation, the windows at particularly the FCA, are no doubt shaking and their walls rattling!
Just a couple of days ago, a powerful parliamentary commitee published their findings in to the performance of the FCA and described it as ““incompetent”, “too often failing” and are calling for it to be overhauled. Their damning report can be found here.
The FCA’s primary operational objectives are –
Secure an appropriate degree of protection for consumers
Protect and enhance the integrity of the UK financial system
Promote effective competition in the interests of consumers
They also now have a new secondary objective:
“to develop the international competitiveness of the economy of the UK (including in particular the financial services sector), and its growth in the medium to long term”
It is very clear that the third objective and the new secondary objective have now become the subject of intense focus from the Government. Ministers are making regular and public announcements about what they expect.
It is going to be interesting to see how this develops. There are the first signs of some initiatives but at the moment there is little sign that the pace of change to promote effective competition and therefore making the UK more competitive will be implemented quickly.
The first “win” was the improved Listing Rules enabling businesses to list in the UK in a quicker and simpler way. The speed at which this was done, to stop businesses turning to easier listing markets in the USA and Europe, did show the FCA can be fleet of foot when it has to be.
However, other areas of more interest to businesses operating in consumer markets are progressing much more slowly. For example the implementation of changes to point of sale Information Disclosures, the Advice Boundary Review, reform of the FCA Handbook of Rules, and the recently announced review of the Redress rules are all chugging slowly along.
Given that Nikhil Rathi, Chief Executive of the FCA, is only appointed until 30th September 2025, there is now less than a year for him to show he can deliver fundamental change to make UK financial services more competitive. Maybe he, and the Government, know that is unlikely to be long enough. So will it happen and who may be asked to deliver it? Watch this space!
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