The UK’s main financial regulator, the Financial Conduct Authority (FCA) has published its latest survey about the nature and scope of its relationships with the firms it regulates in the country. And it says those relationships are positive.

The FCA and Practitioner Panel 2023/24 survey findings provide valuable feedback on the regulator’s performance, with the regulator saying: “We use the results to get a better understanding of the issues affecting firms and assess whether any changes should be made to our approach.”

The findings of the survey have been published at a time when the UK regulator is under extra scrutiny, both from foreign investors and, more importantly, from the UK government.

Earlier this month, the government promised to put an end to regulatory practices that were “needlessly holding back investment” in the country. Prime Minister Keir Starmer recently told an International Investment Summit in London he would pave the way for foreign investors to come and invest in Britain by “ripping up bureaucracy.”

Many saw this as an open criticism of aspects of the FCA’s work. At the same time, foreign investors have also grown frustrated with what they see as overregulation by the FCA.

But the independent body responded to critics by saying there was a need for “improving our understanding of how financial services regulation affects economic growth.”

Key findings

The survey is conducted every year, with the aim of establishing a strong relationship between the firms and the regulator. Feedback is collected from a wide range of firms, irrespective of their size and business model.

According to the FCA, the findings of the latest survey show “that the majority of firms have told us they have a positive view of the FCA’s performance over the last year.”

“Firms remain satisfied with their relationship with the FCA and are confident that the organisation can achieve its primary objectives. This is encouraging particularly given the recent pace and volume of regulatory change.”

8 out of 10 flexible firms believed that the FCA was delivering on its strategic objectives. However, once again there was a comparatively lower score of 70% for the regulator’s ability to ensure effective competition.

Overall, there is an improvement in the satisfaction and effectiveness category, with firms seemingly more satisfied with the FCA’s work and having a more positive opinion about the effectiveness of the FCA’s policies and decisions.

For satisfaction, respondents have given the FCA a score of 7.4 out of 10. This is a clear improvement on last year’s score of 6.9. For effectiveness, the results show a score of 7.2, which is again an improvement on last year’s score of 6.7.

Also, 94% of the fixed firms who responded to the survey request believed that the FCA was delivering on its strategic objectives. This score was 88% in last year’s survey. Among its multiple objectives, it’s worth noting that the regulator got a comparatively lower score (68%) for ensuring ‘effective competition’.

Among the flexible firms, 8 out of 10 believed that the FCA was delivering on its strategic objectives. However, once again there was a comparatively lower score of 70% for the regulator’s ability to ensure ‘effective competition.’

This year’s survey, unlike the previous ones, also asked firms for feedback about the “FCA’s secondary international competitiveness and growth objective (SICGO).”

Only 29% said the FCA could achieve this objective. 47% said they were not confident. The rest said they did not know. And the majority of the fixed and flexible firms (more than 90%) said they didn’t know any risks in their markets that the FCA was not aware of.

Only 9% of respondents said their trust in the regulator had declined over the past 12 months.

There was also a positive feedback on the impact of regulation, with more than three quarters of the respondents saying the FCA’s work helped the UK’s reputation as a financial marketplace and helped deliver better outcomes for customers.

When it comes to trust, only 9% respondents said their trust in the regulator had declined over the past 12 months. This is still an improvement from last year’s survey where 22% had said they had less trust in the FCA’s work.

Most of the respondents also seemed to be happy with the FCA’s communication, calling it clear and consistent.

A majority of the firms did seem to be burdened by the amount of information and data they had to provide to the FCA – 39% of them said they understood the reasons for so many requests from the regulator. But 28% thought the high volume of data requests was unnecessary.

Some 63% of the respondents with Appointed Representatives said they had seen an increase in oversight due to the FCA’s actions in the past 12 months.

Lastly, nine in 10 firms said they had become more operationally resilient over the past 12 months and that they understood this was also something the FCA wanted to ensure.

In terms of overall trust and confidence in the FCA’s work, around three quarters of the fixed and flexible firms said their trust and confidence in the regulator over the past 12 months had remained the same as in previous years.

The majority of the fixed firms, more than three quarters of the respondents, said they were satisfied with the FCA’s supervisors and thought they had a sound knowledge of the relevant rules and regulations. Most of the flexible firms also had a positive opinion about the FCA’s staff in general.

Areas for improvement

Despite the overall positive feedback from the firms who took part in the latest survey, there were also some areas where they thought the FCA’s work could improve in the future. These include:

• doing more to facilitate growth and competitiveness;
• ensuring that the FCA acts proportionately when introducing new initiatives and requests on firms;
• improving the data collections process to reduce the regulatory burden on firms, demonstrating how we are using the data firms provide.

The FCA has said it is also taking steps to address some of these challenges. These include the publication of a report into how the regulator is delivering growth.

Other measures include consultation around the costs and benefits of introducing new policies, simplifying the rulebook, improving data collection processes and ensuring better communication between firms and the regulator.

The FCA has said: “Our success depends on the strength of the relationship between firms and the regulator. We will continue to listen to feedback to help improve how we operate and use the results as we develop our next strategy.”