FCA Risk Outlook

The publication of the FCA’s Business Plan – see separate article – was accompanied by the FCA Risk Outlook 2013.

The FCA Risk Outlook identifies potential risks, some of which may take years to resolve. On the other hand the Business Plan will include details of work planned for 2013/14 to address identified risks.

The priority risks identified include: design of products and services that are not in consumers’ long-term interests or that respond to real needs; lack of transparency by distribution channels (this will include a review of financial promotions, wholesale conduct strategy, and the second phase of visits to asset managers in respect of conflicts of interest); over-reliance on, and inadequate oversight of, payment and product technologies; a shift towards more complex funding strategies or structures that lack adequate oversight; and poor understanding of risk and return (CFDs and unregulated collective investment schemes are included here). Further details can be found in Table 2 of the document whilst Chapter 4 will provide more detail on identified risks.

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