On 19 March 2024, the FCA released its business plan for 2024/25 which outlines its focus on several key areas to align with their three-year strategy, which comes to an end in 2025. The FCA has placed a particular focus on the following commitments:
Reducing and preventing financial crime
One of the main commitments the FCA highlighted for the year ahead was reducing and preventing financial crime, as part of their response to the two strategy documents published in 2023 – the Economic Crime Plan and the Fraud Strategy. In particular, it wants to lower the incidence of money laundering in firms it supervises. The FCA plan to do this by increasing its investment in systems that use data to tackle financial crime in higher risk firms. It also intends to focus on proactive assessments of anti-money laundering systems in firms, as well as strengthen the level of supervision of firms' sanctions systems.
Dealing with problem firms
The FCA is determined to improve its auto-detection capabilities to swiftly identify firms and individuals that pose a risk. Once these problem entities are identified, the FCA intends to use its full suite of regulatory tools to prevent further harm. This includes identifying and overcoming any obstacles within its regulatory framework that may limit its ability to act decisively against such firms.
Taking assertive action on market abuse
The FCA is committed to significantly bolstering its ability to address market abuse in the 2023/24 period. The plan includes enhancing the detection and management of market abuse across various asset classes, using advanced data analysis to uncover patterns and connections. The FCA will focus on improving market monitoring and intervention, particularly in the Fixed Income and Commodities markets. Additionally, the FCA will publish updated Market Cleanliness Data in Q3 2024, which aims to be more effective in identifying unusual trading activities.
Consumer Duty
The FCA will actively intervene in cases where firms fail to implement the new Consumer Duty, with particular attention to the treatment of vulnerable customers. The regulator will ensure that firms are upholding the standards required by the Consumer Duty, demonstrating the FCA's ongoing commitment to consumer protection.
Conclusion
The FCA's business plan for 2024/25 demonstrates a robust and multi-faceted approach to financial regulation, with a strong emphasis on combating financial crime, enhancing market integrity, and protecting consumers. By leveraging technology and data analytics, the FCA is poised to identify and address risks more effectively.
Adam Epstein comments: "As the FCA unveils its business plan for 2024/25, the last year of their three-year strategy, we are seeing a continued emphasis on rigorous investigatory and enforcement measures, with no great surprises but a reaffirmed dedication to upholding market integrity. The plan's focus on enhancing capabilities to combat financial crime and the assertive stance on Consumer Duty reflect the FCA's ever-increasing role in protecting retail customers. The industry should take note of the regulator's proactive approach and be prepared to align with these evolving standards."