Changes in how the FCA will work revealed

1The Financial Conduct Authority (FCA) has 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. It recognises the differences in approach required across the industry given its size and variety, based on emphasising 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. These changes also 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 our 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 approach to the regulation of large and smaller firms.
  • - A new Strategy and Competition Division will build on the FCA competition capabilities, bringing together more of the market-based work supported by an enhanced data, intelligence and research capability to enable better prioritisation and focus across the organisation.
  • - A new Risk Division to provide a strategic approach to the management of internal and external risk.
  • - A new Markets Policy and International Division will focus on increasing the FCA’s focus and influence on the European stage.
  • - A Market Oversight Division will be created incorporating the UKLA and Market Monitoring functions. Other specialist market supervision functions will be integrated with Supervision.

The changes will commence from 5 January and will be fully in place by April 2015.

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