This review seeks to identify and remove or simplify rules that may overlap with the newly introduced Consumer Duty, which aims to ensure that businesses provide favourable outcomes for consumers purchasing financial products and services. The FCA's effort to reduce regulatory complexity is intended to decrease operational costs for firms, support innovation, and improve risk-taking necessary for growth. The main goal is to improve the international competitiveness of the financial sector and contribute to long-term economic development.
Representatives from the FCA noted that the introduction of the Consumer Duty marked a significant enhancement in consumer protection by enforcing higher standards and prioritising customer needs. They emphasised that this review presents an opportunity to further streamline the FCA’s rulebook, aiming to reduce business costs and support economic competitiveness.
In addition to the general review, the FCA is also focusing on simplifying regulations within the commercial insurance sector, which has a market value exceeding GBP 15.5 billion in the UK. The regulator is exploring whether altering customer categorisation could decrease the time required to onboard new clients or renew existing contracts, potentially lowering regulatory costs and enhancing market competitiveness.
The announcement of these reviews coincides with the publication of the FCA’s first report on its secondary objective to support UK competitiveness and economic growth. The report highlights improvements in the FCA’s authorisation process, with 98% of cases now assessed within statutory deadlines, up from 78.9% in the first quarter of 2022/23.
The FCA has also introduced support measures for overseas wholesale financial firms seeking to operate in the UK and has implemented significant reforms to the listing rules. Furthermore, the regulator continues to support financial market innovation through initiatives such as the permanent Digital Sandbox, which aids early-stage product development.
Starting on 1 August, the FCA will consult with a new independent panel of experts when conducting cost-benefit analyses for proposed regulations expected to impose net annual direct costs of GBP 10 million or more on the industry.
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