The FCA publishes its 2018/19 Business Plan

23 April 2018.

On 9 April 2018 the FCA published its Business Plan for 2018/19, demonstrating its continued focus on culture and governance in firms, tackling financial crime and the role of technology in the financial services industry.

According to the FCA, this year's Business Plan reflects the high level of resource the regulator needs to dedicate to Brexit, which will inevitably affect the amount it can do in other areas. In particular, the FCA notes that it will work with the Government to ensure appropriate transition for EEA firms, and will work towards operational readiness for withdrawal from the EU.


Nonetheless, the FCA has identified other cross sector priority areas including: 

  • Firms' culture and governance: the FCA states that this should drive behaviours and produce outcomes likely to benefit consumers and markets. The regulator refers especially to the finalisation of the Senior Managers and Certification Regime ("SM&CR") this year.

  • Financial crime and anti-money laundering: this includes work embedding the new Office for Professional Body Anti-Money Laundering Supervision, and the financial crime review of e‑money (a report on which is planned for Q2 2018/2019).

  • Data security, resilience and outsourcing

  • Innovation, big data, technology and competition: the FCA notes that it will further develop its relationship with the ICO as GDPR comes into force, and will publish an updated Memorandum of Understanding setting out how they will work together. The regulator will publish a discussion paper on cryptocurrencies later this year with the Treasury and Bank of England.

  • Treatment of existing customers: this includes continuing work on pricing practices in retail general insurance, and publishing a policy statement on providing SMEs access to FOS.

  • Long-term savings, pensions and intergenerational differences

  • High cost credit: this includes finalising the review of high-cost credit products. 

As well as this, the FCA has identified priorities for each sector, which include: 

  • Wholesale financial markets: among other things, the regulator aims to report on money laundering in capital markets in Q1 2019/20 and publish a document on its approach to market integrity in Q4 2018/19.

  • General insurance and protection: as well as implementing the Insurance Distribution Directive ("IDD") (which comes into force on 1 October 2018), the FCA will publish an interim report from the Wholesale Insurance Brokers Market Study. The regulator plans to conclude the first phase on diagnostic work on value in the distribution chain in 2018/2019, and to evaluate the effectiveness of 2015 rules on GAP insurance.

  • Retail investments: the FCA will review the impact of FAMR and the RDR in 2019, and will continue to mitigate harm from firms selling CFDs and spread bets to retail consumers. The Investment platforms market study interim report will be published in summer 2018.

The FCA's priorities


Culture and governance remains a key priority for the FCA. As RPC has previously noted, during last year the FCA issued several final notices to individuals. We expect the FCA only to increase its efforts to hold individuals to account in this way. This summer will also see the finalisation of the SM&CR rules for all financial services firms.  At present the SM&CR regime applies only to banks, building societies, credit unions and certain investment firms.  The primary aim of SM&CR is to make individuals more accountable for their own and their firm's conduct and competence. The regime will start for insurers on 10 December 2018, and the implementation date for solo regulated firms is likely to be mid to late 2019. The expansion of this regime to all financial services firms represents a large shift for these firms in their organisational structure and accountability to the regulator.  Firms should be considering changes that will need to be made well in advance, in combination with adaptions necessary under GDPR and IDD (for insurers).


As expected, the Business Plan has also focussed on the pensions market, which has been a significant area of attention for the FCA and Parliament in recent months. In March this year, the regulator published its policy statement on changes to the rules for firms providing pension transfer advice, as well as a consultation paper on further changes to improve the quality of pension transfer advice. The Business Plan notes more plans for 2018, including the collection of data from all firms with pension transfer permission, to assess practices across the entire market and identify the most effective ways to reduce harm. This area will undoubtedly be subject to more focus this year in terms of regulatory change and enforcement.


Similarly to last year, the FCA's Business Plan continues to focus on the challenges and opportunities that technology poses for the financial services sector. The Plan notes two themes to address technological regulation, namely application and resilience, and highlights the role of FCA Innovate and the regulatory sandbox to encourage firms to develop and test new financial services products. As the FCA states, the withdrawal from the EU makes it more important that UK markets remain visibly reliable. Indeed the FCA plans to work with interested foreign regulators on a blueprint of a global sandbox. What remains to be seen is how much attention the regulator can dedicate to these other areas whilst Brexit demands its time and resources.


Alongside its Business Plan, the FCA has also published its Sector Views document, which sets out its views on how each sector is performing. Both this and the Business Plan will be invaluable for firms considering regulatory hot topics, in what will prove to be a busy year for the FCA.

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