FCA Business Plan

The FCA’s very first Business Plan has been published. As has previously been announced, the FCA will be much more proactive , “acting earlier and more decisively than the FSA”.

Asset managers should note from page 18 that in recognition of the seriousness of issues identified in respect of conflicts of interest (see article on ‘Corporate Access’ – although this topic also gets a mention under ‘Wholesale conduct strategy’ on page 19), the FCA will be carrying out a further round of visits to firms. With this in mind, asset management firms may wish to review – where they have not done so already – current practices to see whether there may be issues with conflicts or corporate access. Other key aims include increasing firms’ awareness and compliance with the CASS rules.

Chapter 3 leaves no doubts that the FCA will continue to use enforcement action to maintain effective regulation; tackling market abuse and financial crime will remain high on the agenda. We are also told that in the coming year the new regulator will build on thematic work undertaken on Suspicious Transaction Reports and Transaction Reporting.

The FCA budget for 2013/14 (chapter 6) reveals an Ongoing Regulatory Activity (‘ORA’ – basically this is the cost of its core operating activities) figure of £445.7m. The FSA’s equivalent for last year was £543.5m, although it must be remembered that the current budget in question relates only to the FCA and does not include any PRA element. The Annual Funding Requirement (‘AFR’ and which includes ORA and allows for planned expenditure) is £432.1m (£578.4m last year with largest component, not surprisingly, being £32.5m for regulatory reform implementation). Neither the ORA or AFR includes costs (£12.6m estimated) relating to the consumer credit regime which will fall under the FCA in due course. The headcount in the budget is 2,848 full time employees, but again this is only in respect of the FCA; the FSA headcount in last year’s budget was 3,992.

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