The FCA’s chief executive Nikhil Rathi has warned authorised firms must use their permissions or risk losing them.
A speech published on the FCA’s website explains how Rathi sees the regulatory landscape evolving.
Big themes include what the UK’s departure from the European Union means for the rule book and applying new ESG proposals to capital markets.
The most striking line of the speech for advisers concerns what Rathi said about supervision.
“Our robust approach continues in our supervision of firms. If, once we do authorise a firm, we see they are not using their authorisation or indeed misusing it, we are not afraid to act quickly to remove their permissions,” he said.
“They will have to ‘use it or lose it’. We also anticipate in more cases, where there are significant risks, that we will need to supervise overseas firms, accessing the UK market more directly to make sure they meet our standards.”
Leaving the EU allows the FCA to design rules that better suit UK markets while ensuring appropriate safeguards and upholding high standards, Rathi added.
He pointed out next month it will bring forward a consultation seeking views on removing other barriers to companies listing.
This will increase opportunities for investors without compromising on safeguards.
A review led by former EU commissioner Lord Hill has urged an opening of the City’s listing floodgates.
The FCA is also consulting on several measures including an alternative approach to listing SPACs.
On ESG Rathi said: “Sustainable finance also demands a global response. The Chinese central bank and the US Treasury are leading a G20 Sustainable Finance Working Group, putting sustainable finance back at the heart of the G20 agenda under the Italian presidency.
“The new United States administration has confirmed that international cooperation in tackling climate change is a high priority. Our work in this area is world-leading and Sacha Sadan will shortly join us as our first director of ESG to help propel it forward.
“We were one of the first countries to introduce climate-related financial disclosure requirements for listed companies, in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD).”
Today the FCA published new proposals on climate-related disclosure rules for listed companies and certain regulated firms.
It hopes that the proposed rules will help to make sure that the right information on climate-related risks and opportunities is available along the investment chain.
“Our robust approach continues in our supervision of firms”???
You’re having a laugh mate. The FCA’s supervision of firms is hopelessly chaotic, mis-prioritised and ineffective. It’s just one train wreck after another.
Such stark comments from a Regualtor who has failed to regualte A J Bell and others and has been complict through ignorance and negligence to protect consumers pensions from the likes of A J Bell. This is simply Fraud by a Regulator and their owners the Government. When the regualtor fails change him liek Andrew Bailey who confirms in writing he is not repsonsible for looking after consumers or the Fruad and swindling companies – under Trusts and Master Trusts – and their Statutory Duty of Care. In my opinion any CEO of the FCA or Government should Concentrate on the Fraudsters in Finance – start with Supervision and oversight of Fruadsters like bad payers such as Pension Scheme Turstees.
Wrong priorities as usual along with the pathetic pretend tough-guy postiring that Hector Sants tried with his “We’ll shoot first and ask questions later” comment.
Unused permissions do no harm. This obsession with taking away something that’s not used reminds me of a mad woman I had to deal with when I worked for Strachan, the fitted bedroom people, 30 years ago when I took a two year break from financial services.
A fitter had fitted a wardrobe over an electrical socket. The customer had been advised by the surveyor to have it moved in advance of the fit, but she hadn’t bothered so the fitter fitted the wardrobe over it. The mad woman duly went ape so I had to go do a site visit. She insisted that it was dangerous because it didn’t have a plug in it. I patiently explained that unlike water, electricity would not leak out.
Thinking back, I’m sure the mad woman mentioned that she worked in financial regulation…
That stupid soundbite came from Martin Wheatley. The stupid one from Hector Sants was: Be afraid, be very afraid.
That has made my day…….
What’s the rationale behind this threat? Does it really matter if an adviser doesn’t use certain permissions for an extended period? He might only need to advise on a particular subject or product very occasionally but, when the time comes, it could be darned inconvenient, both for him and his client, if the FCA has arbitrarily cancelled his permission in that area.
As says Neil, Unused permissions do no harm. Over an extended period, an adviser’s knowledge may become a little rusty, but there’s no reason why that knowledge cannot be refreshed. That’s what CPD is all about.
Permissions are for an Activity not a Product, So arranging or giving advice can be for any product. The areas are Activity = a permission, investor type, ie Professional Client or Retail Client, maybe more focus should be is the underlying product suitable for the investor type and if you are say no longer marketing to an investor type that is the focus a change of business plan…
Unused Permissions: you might not have a client for 12 months in a particular arrangement but be prospecting for one, but then you cannot prospect if you don’t have the permission, so its a vicious circle, because when you then land the client you would need to wait a year for the FCA to give you the permission back. Ah I just remembered, growing a business is not a feature of the regulation. So marketing for a prospect is not using the permission for potential business, maybe this needs a clarification is inactive mean you have no intention in your business of ever using it again, or that there is no engaged client for 12 months and this area is no longer in your business plan