FCA wants to change decision-making process for faster enforcement

Rick Steves

The FCA has announced a consultation for its proposal to streamline its decision-making and governance so it can move more quickly to stop and prevent harm faster.

The UK Financial Conduct Authority wants to change its decision-making process and make it faster and more effective in order to better tackle firms and individuals who do not meet the required standards.

The UK’s financial watchdog proposes to move some decision-making from its Regulatory Decisions Committee (RDC) to its Authorisations, Supervision and Enforcement Divisions, as this should give greater responsibility for decisions to senior members of FCA staff close to the matters.

The FCA has announced a consultation for its proposal to streamline its decision-making and governance so it can move more quickly to stop and prevent harm faster.

Emily Shepperd, Executive Director of Authorisations said: ‘The proposed changes will allow us to be more efficient by making best use of the breadth of expertise across the FCA and by putting certain decisions back to the subject matter experts. As a result of that there will be greater accountability in those areas. The changes will help to increase the speed and reduce the regulatory costs of dealing with firms and individuals that fail to meet the FCA standards.

‘As part of our transformation we will continue to take a fresh approach to tackle firms and individuals who do not meet the required standards. As part of this, we aim to become a forward looking, proactive regulator – one that is tough, assertive, confident, decisive and agile.’

The Regulatory Decisions Committee (RDC) is a committee of the FCA Board. The consultation is proposing that certain decisions will now be made by FCA staff including:

– imposing a requirement on a firm or varying its permissions by limiting or removing certain types of business
– making a final decision in relation to a firm’s application for authorisation or an individual’s approval that has been challenged
– making a final decision to cancel a firm’s permissions because a firm does not meet the FCA’s regulatory requirements
– the decision to start civil and/or criminal proceedings

The proposal has no intention to limit the RDC’s decisions in relation to contentious enforcement cases, where the FCA is proposing a disciplinary sanction or seeking to impose a prohibition order.

The consultation closes on 17 September 2021. Following this consultation, the FCA will consider the feedback and aims to publish a Policy Statement in or around November 2021.

The FCA has recently proposed a new consumer duty to ensure stronger protection for retail investors. Earlier this year, the regulator proposed an end to suspensions during a takeover in relation to SPACs.

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