Overview: The FCA Business Plan 2023/24

As an investment professional, you will no doubt have heard about the Financial Conduct Authority’s annual business plan. Published today (5 April 2023), the plan for the coming year outlines the conduct regulator’s objectives and budgets.

In this short post, you will gain an overview of the FCA Business Plan 2023/24 and insights into the broader content of the publication.

What is the FCA Business Plan?

The Financial Conduct Authority (FCA) shares their business plan each April – usually on the last day of the financial year, in readiness for the start of the next. It outlines the work they intend to do in the following 12 months to support and deliver on the commitments put forward in another FCA publication, ‘Our Strategy 2022 to 2025’.

Produced for the first time in 2022, the FCAs three-year strategy set out the three key focus areas for the coming three years, and thirteen commitments to support them. The three focus areas or ‘themes’ were:

• reducing and preventing serious harm
• setting and testing higher standards
• promoting competition and positive change

The activity and outcomes discussed in the Business Plan are largely focussed on achieving (or working toward achieving) these aims.

“With consumers across the UK struggling with the cost of living and market events causing concern, we’ve put vital changes in place, meaning we’re better set up to face these challenges.”

Nikhil Rathi, Chief Executive – FCA

What does the FCA Business Plan cover?

As in previous years, the FCA Business Plan 2023/24 outlines their overall objectives, challenges for the year ahead, focus for 2023/24, plans to deliver on commitments, and budget.

The FCA’s objectives for the next 12-months include:

• securing an appropriate degree of protection for consumers.
• protecting and enhancing the integrity of the UK’s financial system.
• promoting effective competition in the interests of consumers.

The challenges anticipated by the FCA in 2023/24 are:

• their ‘key uncertainties’ which include interest rates and inflation, the risk of unemployment increasing beyond existing projections, the possibility of further declines in disposable income for UK households, and the potential for additional market volatility.
• Wholesale markets
• Cost of living and Consumer Duty

The FCA’s plans for delivering on their commitments in the coming year includes work already started. This is a focus on achieving their aims within those three key areas or ‘themes’.

The first, ‘reducing and preventing serious harm’, includes:

• dealing with problem firms.
• improving the redress framework.
• improving oversight of appointed representatives.
• reducing and preventing financial crime.
• delivering assertive action on market abuse.

Focus two, ‘setting and testing higher standards’, covers:

• putting consumer needs first.
• enabling consumers to help themselves.
• a strategy for positive change – environmental, social, and governance (ESG) priorities.
• minimising the impact of operational disruptions.

Finally, the third focus area, ‘promoting competition and positive change’, discusses:

• preparing financial services for the future.
• strengthening the UK’s position in global wholesale markets.
• shaping digital markets to achieve good outcomes.

The publication closes with a look at the FCA budget for 2023/24, detailing the resources they anticipate needing to carry out planned work for the year. This is comprised of:

• the cost of ongoing regulatory activity (ORA) – core operating activities and staffing.
• their Annual Funding Requirement (AFR) – the total revenue to be generated from the financial industry through things like fees, levies, and financial penalties to fund ORA.
• capital expenditure to develop information and technology systems as well as new operational and regulatory requirements.

“The scale of the FCA ambition to become a data-led regulator means that we are making significant progress across a number of data and digital programmes. These include exploiting our investment in cloud technology, implementing new digital capabilities, and designing new data solutions required by the front line of the business.”

Business Plan 2023/24 via fca.org.uk

 

You can get more detail on the FCA budget from their annual fees rates consultation paper, the most recent iteration of which was published 5^th April 2023 and titled ‘CP23/7: Regulatory fees and levies: policy proposals for 2023/24’.

What’s next?

You can read the FCA’s 2023/24 Business Plan in full on their website today, by following this link.

Later in the year, the regulator will publish their Annual Report. This will communicate the progress made against the activities and outcomes set out in the FCA Business Plan 2023/24.

Author: Holly Helps, Marketing Manager