The FCA has selected six projects as the winners of its research competition, which aims to increase understanding of how regulation can support economic growth.
Each of them will receive a funding award of up to £30,000, the regulator has said in a press release. They now have until 31 March 2025 to complete their research.
The six successful projects are:
- LSE Growth Lab – improving measurement of productivity in UK financial services;
- Edinburgh Innovations Ltd – enhancing competitiveness through increasing export volumes via foreign direct investments;
- Beauhurst (Business Funding Research Ltd) – risk appetite for innovation and productivity in private financial services companies;
- University College London – risks in the UK fintech sector: implications for consumer credit and economic growth;
- University of Birmingham – access and demand for new listed firms’ subsequent financing rounds;
- Fathom Financial Consulting – how regulatory changes may have reshaped financial stability and growth risks since the global financial crisis.
Kate Collyer, the FCA’s chief economist, has said the innovative research proposals “will help us better understand how regulation can enable growth. We look forward to working with participants to drive meaningful change.”
The FCA has announced the result of its latest review into ongoing financial advice. The review “found that financial advisers are delivering suitability reviews in the vast majority of cases included in its review of ongoing advice,” the regulator has said in a press release.
“Financial advisers can charge their clients for ongoing advice and related services, such as arranging transactions or managing a relationship between a retail client and discretionary investment manager,” according to the FCA.
The watchdog says it asked for data from 22 top financial advice firms to assess whether these advisers were actually delivering the services that they claim to offer.
The results have shown that “suitability reviews were delivered in around 83% of cases. In another 15% the client declined or did not respond to an offer of review. There were fewer than 2% of cases where firms reported they had made no effort to deliver the suitability review to clients,” the FCA has said.
“The rules on ongoing services were introduced more than a decade ago, during which time consumer needs and expectations, technology, and market practices have continued to change. Going forwards, the FCA will review the regulatory approach for these services.”
Enforcement
The FCA has said a trial has been scheduled in the criminal proceedings that it brought against John Dance, the former WealthTek LLP principal partner.
The trial will take place in September 2027 at Southwark Crown Court in London, the regulator has said in a press release.
“Mr Dance was charged in December 2024 with alleged misappropriation of £64m [$80.8m] of customer funds between 2014 and 2023,” the press release adds.
Earlier this week, Dance pleaded not guilty to “three counts of fraud by abuse of position and three counts of fraud by false representation” at a plea and trial preparation hearing at Southwark Crown Court.
The Court has also ordered “that the civil proceedings brought by the FCA in April 2023 will remain paused until the conclusion of the criminal proceedings or until further order by the Court.”
Speeches
Nikhil Rathi, chief executive of the FCA, delivered a speech at the Association of British Insurers roundtable on Thursday, 27 February.
Highlights included:
- The FCA is working at pace to support growth initiatives.
- From this morning, firms will be able to choose whether to have a Consumer Duty board champion.
- We cannot rule out other major redress events in the event that systemic breaches of the law emerge, but the FCA is not currently anticipating any further such mass redress events.
- The regulator has heard concerns around the pace of regulatory change, and is aiming for fewer large-scale changes in its next five-year strategy.
“At the FCA, we are willing to be bold. Last year, we made far-reaching changes to our listing rules. More fundamental change is coming on prospectuses. The Advice Guidance Boundary Review aims to be transformative. But we need to be bold not just in what we do, but how we do it,” Rathi said.
He also touched upon a number of topics including building trust and ensuring stability, reducing burdens where possible, commitment to consumer resilience, and supporting innovation.
You can read our detailed GRIP story on Nikhil Rathi’s speech here.
Sarah Pritchard, executive director of consumers, competition and international at the FCA, delivered a speech at the Investment Association Roundtable on 25 February.
Highlights included:
The UK non-bank finance sector manages approximately £14.3 trillion [$18.6 trillion] in assets and continues to grow. Its use of leverage can help boost returns, enhance efficiency, and manage risks. However, when it is concentrated or crowded leverage can become a vulnerability and source of systemic risk.- The FCA believes that targeted improvements to public and private disclosure could go a long way in mitigating the build-up of systemic risk from non-bank financial intermediation (NBFI) leverage.
- Regulators need to have the necessary data, systems and tools in place to effectively monitor NBFI leverage use and identify systemic risk.
- The FCA is playing a leading role in this area, co-chairing a working group to support the ongoing Financial Stability Board (FSB) consultation on a suite of proposals on monitoring, and addressing systemic risk arising from NBFI leverage.
Mark Francis, interim director of wholesale markets sell-side at the FCA, delivered a speech at UK Accelerated Settlement Taskforce industry event on 20 February.
Highlights included:
The FCA has welcomed the recommendations of the Accelerated Settlement Taskforce final report alongside the government and the Bank of England.- Firms should engage with the recommendations and begin their preparations for the transition.
- T+1 will make our markets more efficient, improve liquidity, and support the growth and competitiveness of the UK.
- The FCA has published a ‘one-stop shop’ web page for industry, in order to support T+1, and we will continue to support firms with the transition.
Consultation
In its latest Dear CEO letter, the FCA has written to Asset Management & Alternatives firms to explain its current supervision priorities.
The regulator has said it wants to focus its supervision priorities on three key areas this year, which include the following:
- supporting confident investing in private markets;
- building firm and financial system resilience against market disruption, and
- securing positive outcomes for consumers.
“We will also undertake targeted work to support trust in the market for sustainable investment and to reduce financial crime and market abuse,” the regulator has said.
“We are writing to a large and diverse group of firms and know not all the issues raised here will be relevant to your firm. You should discuss this letter with your Board, Executive Committee, and accountable Senior Managers to consider whether the risks of harm discussed here exist in your firm and implement strategies for managing them.”
