Financial Conduct Authority  

FCA: 'Burden of regulatory pipeline appropriate'

FCA: 'Burden of regulatory pipeline appropriate'
 Nikhil Rathi

The chief executive of the Financial Conduct Authority has said the regulator is working hard to reduce regulatory burdens, but that the current regulatory pipeline was appropriate.

In the monthly regulatory initiatives grid, released today (November 1), Nikhil Rathi and Sam Woods, deputy governor of prudential regulation at the Bank of England, said they are embarking on an “ambitious” agenda to help develop a “more effective and efficient” regulatory model.

The pair, who are co-chairmen of the Financial Services Regulatory Initiatives Forum, said: “Many of these changes will enhance firms’ and the economy’s competitiveness and ease operational burdens in the long term, or are meeting important government priorities.

“That is why after careful consideration, we are satisfied that the burden of the current regulatory pipeline, whilst significant, is appropriate."

The pair said despite this, the forum was working on reducing the regulatory burden on firms by aligning longer-term projects with the short-term initiatives.

“This is also something that forum members are keen to keep a close eye on because, if initiatives are well aligned, it should create synergies in implementation, reduce burden on firms and deliver positive outcomes for consumers, markets and firms,” they said.

Rathi and Woods added the forum members were monitoring the cumulative effect of regulatory initiatives, and considering if and where changes are needed.

“Additional coordination has the potential to reduce burdens, and forum members are working hard to realise these benefits.”

The grid includes a number of initiatives around green finance, including additions around introducing the Sustainable Finance Disclosure regime, net zero transition plans and work on environmental, social and governance issues in capital markets. 

Beyond this there's work around greater diversity and inclusion in financial services firms.

In total this month's grid contains 134 initiatives including those postponed due to the pandemic. 

The grid, first published in May 2020 by the Financial Services Regulatory Initiatives Forum, sets out the regulatory pipeline.

This is so the financial services industry and other stakeholders can understand – and plan for – the timing of the initiatives that may have a significant operational impact on them.

Near term work listed on the grid includes the publication of final climate related disclosure rules for the likes of asset managers, life insurers, and FCA-regulated pension providers in Q4 2021, while medium term initiatives include the regulation of pre-paid funeral plans to be brought within the FCA’s perimeter in July 2022.

UK Green Taxonomy criteria and transforming data collection are listed as long term initiatives. 

Last week, the FCA launched an open-ended investment fund structure giving investors access to infrastructure and private equity but with a notice period of at least 90 days.