FCA says handbook review still in pipeline

FCA says handbook review still in pipeline

The Financial Conduct Authority still intends to carry out a root and branch review of its handbook but has said it will not take place until after Britain leaves the European Union.

Speaking at the annual summit of the Personal Investment Management & Financial Advice Association, the FCA's acting director of strategy Richard Monks said this review - first mooted in 2016 - was still in the pipeline.

But he warned: "We are yet to determine the scale of this piece of work and if we are not careful it could be like painting the Forth Bridge and we will not satisfy all demands."

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Mr Monks said the FCA would start this process after Brexit by asking the industry what "strategic principles" it should base this review on.

But he said this was still an important piece of work: "Changes are often patched onto the existing framework which becomes more complex over time and less coherent. Any handbook left unchecked simply grows and grows and grows."

When he first mooted the possibility of a handbook review Andrew Bailey, the FCA's chief executive, said if the existing handbook was printed out and its pages were stacked on top of each other, it would be more than six foot tall.

Mr Monks also reiterated the FCA's desire to use technology to reduce the burdens on financial services companies and therefore cut costs to consumers, such as using artificial intelligence to predict which firms are likely to mis-sell based on information such as complaints data.

Last month the FCA revealed it was working on plans to use analytics to address mis-selling and phoenixing.

Mr Monks said the FCA was exploring whether it could use technology to allow instant regulatory reporting in retail financial services, as it does in the wholesale market.

He said: "It would significantly reduce the cost of regulatory reporting, in fact separate regulatory reporting could cease to exist.

"It would allow us to focus on higher risk investments and advice firms more likely to mis-sell."